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Special Report

Canada Industrial National Report

4Q 2023

Booming Sector Output Aids Fundamentals;
Rising Vacancy Offers More Space Options

Industrial-intensive sectors continue to outperform. For years up until 2022, Canada’s industrial space-using sectors had either underperformed or grown at a similar rate compared to the overall economy. The global health crisis, however, seems to have bucked this trend with surging demand for e-commerce in the early stages of the pandemic, which was later followed by supply chain nearshoring due to escalating global geopolitical tensions. Year-over-year output growth in the industrial space-using sectors, as a result, exceeded total GDP growth by 200 basis points in 2022 and 120 basis points in the first half of 2023 — the widest growth rate gaps within the past 15 years. This out-performance led to a significant increase in demand for distribution centres, warehouses, manufacturing facilities and data centres, resulting in fast-declining vacancy rates and double-digit rent growth across Canada’s major metros over the past two years.
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