Demand continues to outpace the production of new supply
The Edmonton industrial property market has seen its vacancy drop by 0.5% on a quarterly basis to reach 3.9% in Q3, spurred by the lack of new supply available for lease, according to Avison Young.
This amounted to 6.46 million square feet of vacant industrial space during the quarter.
“Demand for industrial products remains greater than supply,” Avison Young said. “While the pandemic has been hard on many businesses, there are others who have flourished and continue to seek new spaces to match their growth.”
“A primary driver of the robust development activity on the Edmonton market over the last two years has been focused on purpose-built projects, although new speculative projects have certainly been making waves.”
Key to the market’s current dynamics is the increased prominence of new technology and the demand for space to accommodate these innovations.
“The pandemic has put a spotlight on the acute labour shortage prevailing in the logistics and supply chain sector, at a period where demand for these services exploded worldwide,” Avison Young said. “To keep up with increased reliance on this sector in the context of labour shortage, innovative technologies requiring new skills are being implemented. Labour shortage is likely to be a persistent issue until the talent pool has had time to adjust and develop these new skill sets.”
However, while rising rates, inflationary pressures, and labour issues will continue to test the Edmonton market’s resilience, the region’s industrial outlook remains robust.
“We are expecting available space will continue to be absorbed, at least in the short to medium term,” Avison Young. “As a result, more emphasis might be placed on vacant, developable land parcels in anticipation of even more development starts down the road.”