2019-11-13_DTZ戴德梁行_Industrial_Q3_2019_MARKETBEAT_Waterloo_Region_Guelph_2页_675kb

Waterloo Region Industrial Market Summary

Core Content Overview

The Waterloo Region industrial market report provides a detailed analysis of economic and market indicators for the region and its submarkets, highlighting trends in employment, unemployment, vacancy rates, net absorption, and rental prices. The report also includes key sales transactions and market outlook for the coming quarters.

Economic Indicators

• Waterloo Region Employment:

  • Q3 2018: 298,000
  • Q3 2019: 299,000
  • 12-Month Forecast: ▲ (upward trend)

• Waterloo Region Unemployment Rate:

  • Q3 2018: 7.4%
  • Q3 2019: 5.9%
  • 12-Month Forecast: ■ (stable)

• City of Guelph Employment:

  • Q3 2018: 89,000
  • Q3 2019: 94,000
  • 12-Month Forecast: ■ (stable)

• City of Guelph Unemployment Rate:

  • Q3 2018: 4.1%
  • Q3 2019: 5.3%
  • 12-Month Forecast: ■ (stable)

• Canada Unemployment Rate:

  • Q3 2018: 6.0%
  • Q3 2019: 5.7%
  • 12-Month Forecast: ▲ (upward trend)

Market Indicators (Overall, All Classes)

*Numbers adjusted to include properties for sale

Overall Net Absorption/Overall Asking Rent 4Q Trailing Average

• The trailing average for overall net absorption and asking rent is shown in the graphs, indicating a downward trend in absorption and stable rent rates.

Market Overview

• Vacancy Rates: Waterloo Region reached a vacancy rate of 2.2% in Q3 2019, a marginal improvement from the all-time low in Q1 2019.
• Net Absorption: Despite no new inventory in Q3 2019, the availability of less desirable space led to a negative net absorption of -182,829 sf.
• Rental Rates: The average asking rent for industrial space in Waterloo Region dropped to $6.18 per square foot, though Class A build-to-suit spaces face upward pressure.
• Future Supply: Approximately 330,000 sf of upscale industrial space is projected to be completed by Q4 2019, with over 2.5 million sf proposed for delivery in the future.
• Demand and Supply Balance: The additional inventory may not be sufficient to meet the growing demand for manufacturing and warehousing space, especially given the uncertainty in the North American economy.

Outlook

• Supply Constraints: Waterloo Region and Wellington County are experiencing downward pressure on available industrial space due to a lack of land and high demand.
• Demand Trends: Companies are struggling to find adequate space, particularly near Toronto's urban core.
• Investor Behavior: Owner occupiers are willing to pay above market rates for suitable industrial properties.
• Lease Trends: Growing economic uncertainties have led to a shift away from long-term leases.
• Rental Rates: The direct weighted average net rent is $6.18, while the average asking rent is $2.89, and the gross rent is $9.07.

Key Sales Transactions Q3 2019

About Cushman & Wakefield

• Cushman & Wakefield is a global real estate services firm with 51,000 employees across 400 offices in 70 countries.
• In 2018, the firm generated $8.2 billion in revenue from core services such as property management, leasing, and capital markets.
• The report is provided by Chad Vrenjak, Market Analyst at Cushman & Wakefield Waterloo Region.