2019-11-13_DTZ戴德梁行_Industrial_Q1_2019_MARKETBEAT_Waterloo_Region_Guelph_2页_457kb

Waterloo Region Industrial Market Summary

Core Content

The Waterloo Region industrial market has experienced significant growth and demand in Q1 2019, despite challenges in supply and economic uncertainty. The region's economic and industrial performance is closely tied to broader trends in Ontario and Canada, with a focus on employment, unemployment, and market indicators such as vacancy rates, net absorption, and rental prices.

Main Economic Indicators

• Waterloo Region Employment:
  • Q1 18: 279,000
  • Q1 19: 297,000
  • 12-Month Forecast: ▲ (increase)
• Waterloo Region Unemployment:
  • Q1 18: 5.3%
  • Q1 19: 4.7%
  • 12-Month Forecast: ▼ (decrease)
• City of Guelph Employment:
  • Q1 18: 89,000
  • Q1 19: 95,000
• City of Guelph Unemployment:
  • Q1 18: 5.3%
  • Q1 19: 1.7%
• Canada Unemployment:
  • Q1 18: 5.8%
  • Q1 19: 5.8%

Market Indicators (Overall, All Classes)

• Overall Vacancy Rate:
  • Q1 18: 4.2%
  • Q1 19: 1.8%
• Net Absorption (sf):
  • Q1 18: -53,006
  • Q1 19: +267,906
• Under Construction (sf):
  • Q1 18: 154,206
  • Q1 19: 436,280
• Average Asking Rent:
  • Q1 18: $5.95
  • Q1 19: $6.75

Market Overview

• The Waterloo Region and Guelph have seen a dramatic spillover effect from GTA demand, with industrial space in high demand and limited supply.
• Vacancy rates have fallen significantly, leading to record high scarcities.
• The demand for industrial space has revealed the obsolescence of dated inventory, as firms seek new and modern facilities.
• Listed rates for new builds and turnkey space are well above historical averages, indicating strong market activity.
• Despite some construction underway, the excess demand and scarce supply reflect an overall loss of economic utility for the region and the province.

Outlook

• The region's economy is parallel to Southern Ontario, with growth constrained by limited supply and ambiguous expectations.
• Foreign interests have contributed to the glut in demand, affecting market dynamics.
• Zoning restrictions and a lack of action to reposition existing inventory have limited the availability of industrial space.
• The inability of municipal and provincial governments to respond to growth with appropriate policies has exacerbated the situation.

Submarket Analysis

Key Sales Transactions Q1 2019

Key Insights

• The industrial market in Waterloo Region and Guelph has shown strong demand, with vacancy rates declining sharply and net absorption increasing.
• The limited supply of industrial space and high demand have led to increased rental rates, especially for new builds and turnkey space.
• The lack of new construction and zoning restrictions has contributed to the scarcity of industrial space, creating a dilemma for market participants.
• Foreign investment has played a significant role in driving demand, highlighting the global nature of the industrial market.
• The region's economic performance is closely tied to the broader Ontario and Canadian economy, with challenges in policy design and implementation affecting market outcomes.

Contact Information

• Cushman & Wakefield Waterloo Region
  • Address: 4295 King Street East, Suite 401, Kitchener, ON N2P 0C6
  • Website: cushwakewr.com
  • Contact: Connor Ward, Research Analyst
  • Tel: +1 519 804 4394
  • Email: connor.ward@cushwakewr.com