MONTRÉAL - In its Industrial Real Estate Market Report published today, Newmark Knight Frank Devencore reported that market activity across most of the Montreal region was flat in 2013, with only minimal tenant movement taking place. As a result, overall vacancy rates remained essentially unchanged at approximately 6.0%.
"Businesses still seem reluctant to embark on any significant expansion plans, and slow economic growth--in Montreal, real GDP was at 1.4% in 2013--further put the brakes on industrial expansion," said Jean Laurin, President and CEO of Newmark Knight Frank Devencore. "Essentially, the conditions that have existed in the GMA's industrial real estate market over the past few years remain essentially unchanged. There are more than 40 available properties greater than 100,000 square feet. Demand is stronger for spaces in the 25,000-50,000 square-foot range, but supply is limited for properties with clear heights above 24 feet and more modern amenities."
Vacancy and rental rates in the various regions on and around the island of Montreal vary considerably. In the West Island, for instance, which is the GMA's largest submarket and home to many of the city's biotech and high-tech industries, the total vacancy rate is 6.3% and estimated net asking rents are in the $5.20-$5.40 per-square-foot range. In Laval, which is also has a number of industries in the high-tech and pharma sectors, the total vacancy rate is 9.9% and approximately 1.7 million square feet is available for lease or sublet.
There is some new development activity on the South Shore and in the Vaudreuil-Dorion regions. With the recent completion of Autoroute 30, both of these areas should become increasingly important as locations of choice for warehousing and distribution operations. Elsewhere, rising land and development costs are making new industrial projects a challenge, so there is only minimal spec development taking place.
"Given these conditions, space users will continue to benefit from examining their options in the build-to-suit market," Mr. Laurin said. "We also anticipate that there will be interesting tenancy options in the sublease market in the months ahead. Opportunities for space users can vary significantly from region to region, and depend on such other parameters as square footage and the range of building amenities and features, so tenants and their advisors must analyse their real estate needs and the evolving range of opportunities very thoroughly to secure the best occupancy conditions."
About Newmark Knight Frank Devencore
As part of Newmark Grubb Knight Frank, one of the world's leading commercial real estate advisory firms, Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage, exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution. To learn more about our capabilities, please visit www.devencorenkf.com.
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank (NGKF) is one of the world's leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, NGKF employs more than 12,000 professionals, operating from more than 330 offices in established and emerging property markets on six continents.
With roots dating back to 1929, NGKF's strong foundation makes it one of the most trusted names in commercial real estate. Its integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, NGKF serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.ngkf.com
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