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Market Report

Ottawa Industrial Market Report

2025 Investment Forecast

Healthy Fundamentals to Hold as
Leasing Picks Up in an Under-Supplied Market

Low vacancy rate to persist in 2025. As expected, Ottawa’s industrial sector has stayed on solid footing in spite of elevated interest rates over the past two years. The metro’s strategic location between Toronto and Montreal, along with its growing suburban communities, has supported space demand across all bay sizes, preventing the notable pullback in net absorption seen in other larger markets. In 2025, strengthening consumer spending and business investment are likely to help sustain this strong leasing demand amid falling borrowing costs. On the supply side, unlike other major metros, Ottawa has yet to experience a meaningful demand-driven increase in speculative construction. Apart from Amazon’s 2.7 million-square-foot fulfillment centre delivered in 2021, completions have been subdued. Despite holding over 1,000 hectares of vacant land available for industrial development over the next 30 years, as shown in a recent government survey, many builders remain patient and continue to secure tenants before commencing projects. This disciplined construction pipeline is expected to keep new speculative supply growth low in 2025, which in turn will help maintain a tight vacancy rate in the 2.0 per cent to 2.5 per cent range.
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