1
Canadian Industrial
Market OverviewDecember 2016
2016 Toronto Real Estate Forum
Slides assembled by GWL Realty Advisors,
Research Services & Strategy
National Industrial Market Inventory
Data: CBRE 2
185.7131.3 114.6
77.3112.6
761.6
300.4
29.9 12.2
Vancouver Calgary Edmonton Winnipeg WaterlooRegion
Toronto Montreal Ottawa Halifax
Industrial Inventory (MSF) - Q3 2016
Availability Trends Show Several Different Stories
3.8%
9.6%
8.8%
3.4%
8.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Availability Rate Trends, Selected Cities
Vancouver* Calgary Edmonton Toronto Montreal
Data: CBRE 3
Data: CBRE 4
A better measure of demand than vacancy, occupied space
continues to grow in some markets; holding steady in others
Vancouver
Calgary
Edmonton
Toronto
Montreal
90
100
110
120
130
140
150
160
170
Q1
2001
Q3
2001
Q1
2002
Q3
2002
Q1
2003
Q3
2003
Q1
2004
Q3
2004
Q1
2005
Q3
2005
Q1
2006
Q3
2006
Q1
2007
Q3
2007
Q1
2008
Q3
2008
Q1
2009
Q3
2009
Q1
2010
Q3
2010
Q1
2011
Q3
2011
Q1
2012
Q3
2012
Q1
2013
Q3
2013
Q1
2014
Q3
2014
Q1
2015
Q3
2015
Q1
2016
Q3
2016
Industrial Real Estate Demand Growth Compared. Indexed. Q1 2001=100
Vancouver Calgary Edmonton Toronto Montreal
Supply, Demand and Under-Construction Trends. Past 6
Quarters
Data: CBRE 5
4.84 4.66 5.46
8.20
2.864.25
0.18 0.65
6.85
0.58
9.62
1.33 0.54
18.70
0.61
Vancouver Calgary Edmonton Toronto Montreal
New Supply & U/C - MSF
New Supply Past 6 Qs Under Construction Demand Growth past 6 Qs
National Industrial Rental rate trends
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Vancouver
Calgary
Edmonton
TorontoMontreal
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00Q
1 20
06
Q3
2006
Q1
2007
Q3
2007
Q1
2008
Q3
2008
Q1
2009
Q3
2009
Q1
2010
Q3
2010
Q1
2011
Q3
2011
Q1
2012
Q3
2012
Q1
2013
Q3
2013
Q1
2014
Q3
2014
Q1
2015
Q3
2015
Q1
2016
Q3
2016
$ P
SF
Net Industrial Rents, selected cities
Data: CBRE
Retail sales are a key driver of industrial demand
5.2%
-0.1%0.7%
2.7% 2.9%
Vancouver Calgary Edmonton Toronto Montreal
Annual Retail sales growth, Year ending Q3 2016. (Estimates from the Conference Board)
$2,036
$8,125
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Canadian internet-based retail sales ($ Millions) Data: Euro-Monitor
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Other drivers of industrial demandManufacturing
-30% -20% -10% 0% 10% 20% 30% 40%
Quebec Non-Durable
Quebec Durable
Ontario Non-Durable
Ontario Durable
Alberta Non-Durable
Alberta Durable
BC Non-Durable
BC Durable
Manufacturing Sales by Province. Percent Change. Statistics Canada.
1 Year 5 Year
0
1,000,000
2,000,000
3,000,000
4,000,000
2011 2012 2013 2014 2015
Container Shipping Trends. Total TEUs handled. 2011-2015
Halifax
Montreal
Vancouver
Container Shipping
16.10%
-1.00% -1.80%
Halifax Montreal Vancouver
Container Shipping Traffic. TEUs handled. Percent Change (2016 YTD vs 2015 YTD)
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4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
Single Tenant Cap Rate Range by City - 2016Q3
2016Q3 Vancouver Calgary Edmonton Winnipeg Toronto Ottawa Montreal Halifax National
Single-Tenant High 5.00% 6.25% 6.75% 7.25% 5.75% 6.50% 7.50% 7.00% 6.50%
Single-Tenant Low 4.25% 5.50% 6.00% 6.50% 5.25% 6.00% 6.75% 6.50% 5.84%
Multi-Tenant High 6.00% 6.75% 7.00% 7.25% 7.25% 6.50% 7.75% 7.75% 7.03%
Multi-Tenant Low 5.00% 6.00% 6.00% 6.50% 6.25% 6.00% 7.00% 7.25% 6.25%
Source: Colliers International
National Industrial Cap Rates
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