Ottawa's industrial market is tight, and two of the big commercial real estate firms agree on the word for it. CBRE and Colliers both described the city's industrial sector as "constrained" in their third-quarter numbers, even though vacancy ticked up.
Vacancy: a small bump, still tight
Industrial vacancy in Ottawa in the third quarter was 2.8 per cent according to CBRE and 2.6 per cent according to Colliers. The two firms landed a couple of tenths of a point apart, but both used the term "constrained" to describe the city's industrial sector.
Small and medium bays are the squeeze
The market remains constrained because of a continued shortage of small- to medium-bay availability. Small-bay space accounted for 16 of 20 transactions in the third quarter, a sign of how much of the activity is happening in the part of the market where there is the least to rent.
Bigger space is in demand too
Much of the demand for larger chunks of real estate is being driven by defence, aerospace and other technology companies. Supply in the pipeline is already spoken for: more than 95 per cent of the 3.2 million square feet of industrial space under construction is pre-leased.
Amazon is preparing to occupy a new 3.1-million-square-foot distribution centre. The Ottawa Business Journal's report also warns that Ottawa could soon face a shortage of 50,000+ square foot options.
Rents are holding steady
Average asking net rents have stayed relatively steady over the past 12 months at about $17 a square foot. In other words, tight supply has not translated into a visible jump in asking rents over that period, at least on the average figure. The report does not say whether that is expected to change.
Recent deals show the range
Two leases named in the report show the kind of space changing hands. Marquee Pickleball signed on to rent more than 24,000 square feet in Colonnade BridgePort's building, and Multi-Glass Insulation Ltd. decided to lease just over 20,000 square feet.
What it means for Ottawa
Sources: Ottawa Business Journal
