Market relief is not likely to manifest until supply/demand dynamics recover to pre-pandemic levels, new report says
The Ottawa industrial property sector is seeing continuing elevated rental rates and significant investment challenges ahead, according to Avison Young.
The region’s average gross asking rent per square foot stood at $22.09 as of the second quarter, including $7.40 psf average additional rent.
“Until the supply/demand curves revert to pre-pandemic levels, one can expect to see continued elevated local industrial rates – which have increased by 18.85% since Q1 of 2022,” Avison Young said.
At the same time, “the industrial asset class continues to outperform all other CRE asset types” in the region. “New industrial rental rates can exceed office rental rates by as much as $10.00 per square foot per annum.”
Anne Ananda , a commercial broker with Pineapple, said structuring financing over the past 24 months for refinancing and existing revenue properties as well as purchases had been “very challenging.”https://t.co/bw4PH9JjoB#mortgage #mortgageinsights #commercial #mortgagebroker
— Canadian Mortgage Professional Magazine (@CMPmagazine) March 31, 2023
And while vacancy is rising, leasing remains stable.
“Industrial tenants can expect more options when they go looking for space in Ottawa,” Avison Young said. “This bump in availability has shown up in the sublease market primarily, with tenants giving back space.
“The overall vacancy rate against all classes of industrial space sits below 2% and is still considered to be a strong landlord’s market.”
