Montreal’s commercial/industrial rental real estate segment is getting pumped up by a healthy influx of Bitcoin miners and legal marijuana growers, with latest numbers from Cushman & Wakefield showing that the sector’s availability rate is down to a tight 3.2% for Q1 2018.
This is considerably lower than the 5.2% rate from the previous quarter and the 6.7% during Q1 2017.
Demand for Montreal’s spaces, which observers have attributed to the city’s relatively affordable electricity costs, is most starkly observable in the absorption rate. Cushman & Wakefield national director of research Stuart Barron stated that between late 2010 and late 2015, around 500,000 square feet of vacant commercial/industrial space in Montreal was leased every year.
“Since that time, until Q1 2018, absorption has averaged 3 million square feet a year, so we have seen this massive acceleration in activity and Montreal is now the third-tightest major market in Canada,” Barron told the Montreal Gazette.
In the first quarter of this year alone, 1,691,972 square feet of space was absorbed.
“At the local level, you have everything from warehouse distribution, to data centre businesses, to specialized manufacturing,” Barron stated.
And while Bitcoin miners and cannabis growers are currently just a small part of the market, Barron is predicting a sustained pace of growth.
“I think what you’re going to see is the healthiest industrial market in Montreal in 25 years in 2019, barring a significant global shock.”