colliers international report and forecast

8/7/2019 Colliers International Report and Forecast

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MONTRALQUBECOLLRs NTRNATONAL | MART RpORT

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Canadian Market OverviewThe current economic outlook for anada in 2011 remain cautiou but table. anadmonetary olicy and articularly, the target of 2 ercent ination have teered the econoout of the receion.

conomic growth in 2011 will be moderated through develoment in it larget tradartner, the U.s., rik temming from the uroean credit crii, a well a the troloonie. The anadian GDp growth outlook remain around the 3.1 ercent mark for 2011

The overnight interet rate remain at 1 ercent, and i exected to rie to 2 ercent, wthe anticiated hift from timulu to retraint in cal olicy. mloyment growth himroved recently, but the unemloyment rate i till exected to remain in the 7.4 to 7ercent range.

Buine condence ha rien in the at ix month where conervative ending adiligence through the receion aid o. There wa a good rebound in the commercroerty market in 2010 and into the rt quarter of 2011.

SPRING 2011 | INDUSTRIAL

market indicators

spg 2011

vacancy

net absortion

inventory

renta rate

GMA Industrial Market OverviewWhile growth wa more ubdued than it had been at the end of 2010, the Greater MontrArea (GMA) indutrial real etate market continue to tighten a the economy come bato life, and uer make deciion they had long ut o a they weathered the receiWherea the total abortion of 213,273 quare feet in the rt quarter of 2011 i leimreive than the number oted in the econd half of lat year, individual ubmarkwitneed fewer extreme in occuied ace. Modet increae aeared in the Noshore, at land, and south shore ubmarket overowered by maller di in the saiLaurent, Wet land and Mid-Town ector.

The North shore i the only ubmarket that can boat a otive three quarter aborttrend. n other area of the GMA, the lat nine month have been omething of a rollercoaride. Neverthele, the overall vacancy rate currently it at a hitoric low of 6.1 erceThough at rt glance it eem counterintuitive, leae rate are following uit, hoveraround $4 er quare foot in many ubmarket. The micro-market that are cauing thenomenon however are not exected to reit macro-level trend much longer, landlord regain the uer hand, and begin to exert reure on indutrial rent.

QUEBEC

NEWFOUNDLAND

& LABRADOR

NEW

BRUNSW

Waterloo Region

OttawaMontral

Mo


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the market

The need for new indutrial contructioncontinue to challenge the GMA. Deite alight rie in the rt quarter, the vacancyrate in building with a clear height of at

leat 24 feet remain jut above 2 ercent,while the vacancy rate in the le functional,under-24-foot clear height building categorycontinue to dro lowly, due to rice andavailability. nteretingly, among the threeubmarket that oted oitive abortionthroughout the rt quarter, only the Northshore aw a correonding decreae inthe 24-foot and u clear height categoryvacancy rate; elewhere, mot occuancyincreae occurred in older, le functional

building. arly in 2011, maller tranactionwere alo reonible for the bulk ofabortion, both oitive and negative.

Wherea everal ubmarket exeriencuctuation in occuied ace of mothan 250,000 quare feet in 2010 thand fourth quarter, ve-gure jum we

more common in the rt quarter of 2011fact, with jut under 125,000 quare feetoitive abortion thi quarter, the at both cancelled out it third quarter negatabortion, and led the way in occuace among all ubmarket. Althouconolidation reulted in the deartuof ome major tenant acro the GMexanion wa reonible for large chunof abortion, articularly on the Wland and the south shore, a coman

limited by rohibitive contruction cotook advantage of chea leae rate.

Source: Colliers International, April 2011

ne suy, absortion and vacancy rates

0%

2%

4%

6%

8%

10%

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SquareFeet(Millions)

Net New Supp ly Absorp ti on Vacancy Rate

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mARkeT RePoRT | SPRING 2011 | INDUSTRIAL | MONTRAL


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trends

From an overall market erective, trendthat began to emerge lat fall are continuingand deeening. Both leae and vacancyrate continue to fall, reaching level rarely

een in recent year. Meanwhile, demand iconcentrated in maller ace of 20,000quare feet and le and the GMA indutrialmarket continue to erform a delicatebalancing act between growth-fuelledexanion, and the emtying of larger blockdue to conolidation and the wift ace ofglobalization. The Wet land woe arelargely due to an exodu of multinationalfrom Montreal, and broker reort that itcontinue to be dicult to nd mall ace

in Laval. A wideread contruction i

exected to read outward from theNorth shore, broker are couneling enduer to jum on attractive leae beforethe window of oortunity cloe and it

i no longer in landlord interet to oergenerou incentive or leae rate in the$4.50 er quare foot range. Another tellingign of the mall veru large ace dividei that ome medium to large landlordare beginning to hire real etate agencieto hel attract tenant. We will continue tomonitor thi trend a the general markethealth imrove to ee whether or notheavy demand for maller ace will hiftuward to larger block of ace.

vacancy rates For Greater montra

0%

2%

4%

6%

8%

10%

Greater

Montreal

West Island St-Laurent Centre West East End SoutShor

Vacancy Rate Vacancy Rate (less 24') Vacancy Rate (min. 24')

Laval-North

Shore

Source: Colliers International, April 2011

coiers internationa |

mARkeT RePoRT | spRNG 2011 | NDUsTRAL | MONTR


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coNTAcT INfoRmATIoN

aw mManaging DirectorMontreal Region+1 514 764 [email protected]

480 f 61 $1.9 billion USD in revenue

15,000 employees

2.4 billion square feetunder management

$154 billion USD incompleted transactionsover last three years

Information contained herein has been prepared by CoInternational for advertising and general information Colliers International makes no guarantees, representaor warranties of any kind, express or implied, regardinginformation including, but not limited to, warranties of conaccuracy and reliability. Any interested party should unde

their own inquiries as to the accuracy of the informaColliers International excludes unequivocally all inferreimplied terms, conditions and warranties arising out ofdocument and excludes all liability for loss and damages arthere from. This publication is the copyrighted propertColliers Internati onal and/ or its licensor(s). 2011. All rreserved. Colliers International (Qubec) Inc.

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investment

The invetment market ha remainedtagnant over the at everal month.Demand continue to outtri uly, andwith leae rate kirting $4 er quare footin everal ubmarket what little roduct ion the market i failing to attract buyer.Further damening the invetment market ilimited uly creating fewer oortunitiefor invetor than exected. price of

indutrial invetment roduct on both theNorth and south shore have alo remainedtable even throughout 2008 and 2009.A a reult, there are very few deal to befound a the economy imrove, and withcontruction cot at $70 er quare foot,no indutrial ace i currently being builton eculation.

Forecast

Moderate but teady growth i rojectedfor the ret of 2011. Mid-Town, saint-Laurent, and Wet land ubmarket mayee a return to oitive abortion, whileother market hould be able to hold ontotheir oening gain, a the tronghold ofMontreal indutrial economy, includingaeroace and comuter oftware, ram utheir buinee and may eek exanion.

Deite the downizing and outourcingthat continue to aect ortion of the GMAindutrial market, activity ha intenieduggeting the ace of tranaction i etto grow in the ucoming quarter. With theuburban market relentlely tighteningu, there may be room for both newcontruction and riing leae rate in 2011.

mARkeT RePoRT | SPRING 2011 | INDUSTRIAL | MONTRAL

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