Canada is in danger of running out of warehouse space by the end of the year, thanks to the boom in e-commerce sparked by the pandemic, according to commercial-property brokerage CBRE Ltd<\/p>\n
Bloomberg News reports that while a near-record 26.1 million square feet of logistics real estate is under construction, much of it is already leased, according to a report released CBRE. And with vacancy rates for existing warehouses at historic lows, it soon may become nearly impossible for businesses to find places to store their goods.<\/p>\n
\u201cThere\u2019s a significant amount of industrial space that\u2019s needed just to keep up with the change in behavior toward e-commerce,\u201d said Kyle Hanna, executive vice president of CBRE\u2019s industrial and logistics business. \u201cBy the later part of this year, we won\u2019t have space for anyone to go into.\u201d<\/p>\n
Canada lagged behind other developed countries in e-commerce adoption heading into the pandemic, but more recently, online sales have grown faster than in other Western nations, according to researchers at JPMorgan Chase & Co. The share of shoppers who made at least 40% of their purchases online more than doubled by April 2020 from the rate before the pandemic, the bank said in a report.<\/p>\n
The trend has prompted businesses to snap up industrial real estate at a record clip, states the report. About 10.4 million square feet of warehouse space was leased across Canada in the first three months of this year, the CBRE report shows. Vacancy rates in the largest cities \u2014 Toronto, Vancouver and Montreal \u2014 tightened to the lowest levels in all of North America, the brokerage said.<\/p>\n
With new development coming online too slowly to fill the gap in those cities, landlords may have to consider converting retail and office buildings left largely unused during the pandemic into logistics hubs, according to Hanna.<\/p>\n
In one such deal, Amazon Canada Fulfillment Services spent C$40 million ($32 million) last month to buy 40 acres in the Toronto suburb of Pickering that had been home to a local flea market, according to records from data provider Altus Group.<\/p>\n
\u201cIndustrial tenants and developers are having to get creative to free up some space,\u201d Hanna said. This is \u201ca very lean year, making it tough for tenants.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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