Montréal's industrial inventory is gradually rejuvenating
Montréal's industrial inventory is being rejuvenated and renewed, gradually narrowing the modernity gap with other Canadian markets. The relatively high vacancy rate for buildings built before 1976, at 5.3% in Montréal compared with less than 2.0% elsewhere in Canada, partly explains why vacancy rates have traditionally been higher in the GMA. This trend should ease as obsolete inventory is converted and demolished.
- The Greater Montréal Area (GMA) has almost 360 million square feet (msf) of industrial inventory, making it the 2nd largest market in Canada after Toronto (903 msf), and well ahead of the 3rd largest, Vancouver (246 msf). Montréal’s inventory, the cradle of industrialization in North America, stands out for its high proportion of buildings built before 1976, accounting for 42% of the total market. This percentage, which reflects the city's rich industrial heritage, is by far the highest in the country.
- Over the decades, older industrial buildings in the central districts of the island of Montréal have been converted to other uses. It is estimated that nearly 15 msf of former factories, mainly textile, have been converted into office lofts since the late 1990s. More recently, with the shortage of housing, nearly 1.6 msf of obsolete industrial buildings have been demolished and replaced by residential towers, notably in Griffintown, in the Triangle sector (Namur metro station) and on Bates Road in Outremont. Alongside these transformations, development activity since 2015 has added more than 24 msf of new inventory in the GMA, including 17 msf since 2020 alone. This is the biggest wave of construction since the 1980s.
- Montréal's industrial inventory is being rejuvenated and renewed, gradually narrowing the modernity gap with other Canadian markets. The relatively high vacancy rate for buildings built before 1976, at 5.3% in Montréal compared with less than 2.0% elsewhere in Canada, partly explains why vacancy rates have traditionally been higher in the GMA. This trend should ease as obsolete inventory is converted and demolished. The decline in the risk premium traditionally associated with the Montréal market, to just 25 basis points according to Avison Young's latest report on Canadian investment trends, is an early sign of this.