2019-11-13_DTZ戴德梁行_Industrial_Q4_2018_MARKETBEAT_Waterloo_Region_Guelph_2页_456kb

Waterloo Region & Guelph Industrial Market Summary Q4 2018

Core Content Overview

This summary presents the industrial market performance in the Waterloo Region and Guelph for the fourth quarter of 2018, including employment trends, vacancy rates, net absorption, and rental rates. It also highlights key sales transactions and the outlook for the market in the coming year.

Key Economic Indicators

Waterloo Region

• Employment: Increased slightly from 286,000 in Q4 2017 to 298,000 in Q4 2018.
• Unemployment Rate: Declined from 4.9% to 5.1%, indicating a stronger labor market.
• Overall Vacancy Rate: Declined to 1.9%, a significant improvement from 4.2% in Q4 2017.
• Net Absorption: Increased to 454,955 square feet in Q4 2018.
• Average Asking Rent: Rose to $7.19 per square foot, up from $5.71 in Q4 2017.
• Under Construction: Increased to 204,206 square feet.

Guelph

• Employment: Slightly decreased from 92,000 in Q4 2017 to 89,000 in Q4 2018.
• Unemployment Rate: Declined from 6.1% to 3.0%, showing a strong local job market.
• Overall Vacancy Rate: Remained very low at 1.1%.
• Net Absorption: Slightly increased to 150,586 square feet in Q4 2018.
• Average Asking Rent: Rose to $3.01 per square foot, up from $2.83 in Q4 2017.
• Under Construction: Increased to 36,877 square feet.

Canada

• Unemployment Rate: Declined from 5.7% to 5.6%.
• Employment Growth: Continued to be driven by the private sector, particularly in manufacturing, transportation, and warehousing, as well as agriculture and non-medicinal cannabis due to legalization.

Market Overview

• Industrial Development: Technology and online commerce are shaping the industrial market in Waterloo Region, with companies like Well.ca seeking larger warehouse space.
• Vacancy Rates: The Region has seen a decline in vacancy rates, with Guelph maintaining a very low vacancy rate of 1.1%.
• Net Absorption: Strong demand led to 454,955 square feet of net absorption in Q4 2018, with Waterloo Region contributing 454,955 square feet.
• Rental Rates: Average asking rent increased to $7.19 per square foot, showing positive market sentiment.
• Construction Activity: A large amount of construction is underway, with many projects expected to be completed in the first half of 2019.

Outlook

• Economic Uncertainty: Trade negotiations and the recent closure of the GM plant in Oshawa introduce some uncertainty for the manufacturing and industrial sectors.
• Construction Impact: The additional inventory from ongoing and upcoming construction projects is expected to positively impact the market, contributing to economic and job growth.
• Vacancy Rate Trends: It is anticipated that the vacancy rate will remain steady or increase slightly due to the influx of new supply and rising interest rates.
• Future Projects: Additional construction projects are planned for spring 2019, including the use of previously unused greenspace in the Region.

Key Sales Transactions Q4 2018

Summary of Market Performance

• Strong Demand: The industrial market in Waterloo Region and Guelph has experienced strong leasing activity and net absorption, driven by the growth of technology and online commerce sectors.
• Positive Rental Trends: Asking rents have increased, reflecting strong market demand and confidence in the region.
• Construction Pipeline: A significant amount of construction is expected to be completed in 2019, which may contribute to the market's continued growth.
• Regional Variability: While Waterloo Region and Guelph show strong performance, some submarkets like Eagle and Lancaster experienced negative net absorption, indicating potential challenges.

Contact Information

For more information, contact:

• Courtney Jones, Research Analyst
• Tel: +1 519 804 4386
• Email: courtney.jones@cushwakewr.com

About Cushman & Wakefield

Cushman & Wakefield is a leading global real estate services firm with:

• 48,000 employees
• 400 offices
• 70 countries
• Revenue of $6.9 billion in 2017
• Services include property, facilities, and project management, leasing, capital markets, valuation, and more.