With Ottawa’s limited inventory of industrial properties bursting at the seams, a Vancouver-based real estate firm has added to its growing portfolio in the city after closing a $13-million deal for a class-A building in Gloucester.
Parkit Enterprise purchased the 75,000-square-foot light industrial complex at 1151 Parisien St. from an undisclosed seller.
Parkit chair Steven Scott said the acquisition “adds another urban industrial property with strong cash flows in the growing Ottawa market.”
It’s the latest in a string of recent industrial purchases in the National Capital Region for Parkit.
In July, the company bought a 195,000-square-foot property at 415 Legget Dr. in Kanata. That followed its March acquisition of a 180,000-square-foot building at 1165 Kenaston St., just east of the Parisien Street property.
Parkit is far from the only real estate firm looking to grow its footprint in a red-hot industrial market where a shortage of supply has pushed rents near record highs.
With the e-commerce explosion during the pandemic fuelling a spike in demand for warehouse space, real estate experts say Ottawa’s growing prominence as a distribution hub is making the city a go-to destination for all types of industrial investors.
CBRE Ottawa managing director Louis Karam recently told OBJ the city is an “attractive market” for e-commerce and logistics tenants seeking to capitalize on the city’s close proximity to Toronto and Montreal and easy access to major highways.
Availability rate dips
CBRE said the availability rate of industrial properties in Ottawa declined to 2.6 per cent at the end of September, down from three per cent in the second quarter.
Net rental rates dropped slightly to $11.94 per square foot, down from a record $12.06 per square foot at the end of June but still near all-time highs. CBRE said the slight decline reflected “decreasing availability within best-in-class properties” as tenants struggle to find quality vacant space in a market with little in the way of new inventory.
Other observers, such as Canderel Group vice-president of business development Shawn Hamilton, told OBJ earlier this year there’s potential for tens of millions of square feet of new industrial construction within the city’s boundaries – if more land can be opened up for development.
In the meantime, developers have been quick to jump on what little land is available. A one-million-square-foot business park near the corner of Hunt Club and Walkley roads is now under construction, and Karam said the new space is “quickly filling up.”
Meanwhile, Amazon’s 2.8-million-square-foot fulfilment centre in Barrhaven is expected to be completed before the end of the year.
“Once delivered, these spaces will strengthen Ottawa’s foothold as an emerging distribution hub in central Canada,” CBRE said.