1. MARKETBEAT
INDUSTRIAL SNAPSHOT
CANADA Q4 2012
A Cushman & Wakefield Research Publication
CANADIAN OVERVIEW to prioritize the ability to control long-term costs, which is
long
GDP growth is expected to remain restrained underscoring the drive to own.
at 2.0% in 2012 and increase moderately to
Through the second half of 2012, we saw over 3.0 msf of positive
2.4% in 2013 (RBC Provincial Outlook).
absorption across the Vancouver industrial market. Speculative
Western Canadian markets are expected to
development continues to be constrained by excessive land costs. A
rained
outperform the national average, while central
recovery in the U.S. residential sector is creating a spike in demand
and eastern provinces will see slower growth. The exception to this
th.
for BC lumber, and Vancouver is benefiting from this activity.
is Newfoundland and Labrador, where oil production and mining
output is expected to rebound in 2013, contributing to strong The overall vacancy fell from 4.6% to very tight 3.5% in 2012. Many
economic growth. people are concerned that the results of the May 2013 provincial
election could have a negative impact on business activities.
The Canadian job market ended 2012 roaring like a lion but began
2013 bleating like a lamb, with the loss in January of 22,000 net new STATS ON THE GO
positions. However, the national unemployment rate still notched Q4 2011
4 20 Q4 2012 Y-O-Y 12-MONTH
downward by 0.1% to 7.0% in January, the lowest rate in four years. CHANGE FORECAST
The decline was attributed to fewer people looking for work. Overall Vacancy 6.2%
6.2 6.2% 0.0 pp
Softer demand for industrial space over the first half of 2012 gave way
nd Direct Net Asking Rents (psf/yr) $5.62
5.62 $5.78 2.8%
to improved demand momentum in the latter half of the year, driven YTD New Supply (sf) 5,387,955 7,971,550 47.9%
significantly by a pick-up in expansionary activity in Vancouver and
up
Toronto. Both markets have experienced strong occupier dema demand
and are benefiting from strengthening U.S. recovery. For example, a CONSTRUCTION COMPLETIONS
IONS
revived U.S. housing sector is helping to invigorate the lumber 25
industry in British Columbia, while growing strength in consumer
confidence and a related pick-up in U.S. vehicle purchas are having a
up purchases 20
sf (millions)
positive impact on the auto sector in southern Ontario. While the 15
Canadian industrial sector experienced positive absorption of over 14
10
million square feet (msf) in 2012, the vacancy rate held flat at a
21.9
11.2
respectable 6.2%. 5
5.4
8.0
3.9
0
WESTERN CANADA 2008 2009 2010 2011 2012
An interesting reversal of fortunes took place across Western
Canadian industrial markets in 2012, with Calgary handing the
expansionary demand torch to Vancouver in the latter half of 2012. OVERALL RENTAL VS. VACANCY RATES
R
Strong commodity prices over the first half of 2012 led to impres
impressive
$7.00 8.0%
expansionary growth in Calgary’s industrial markets and triggered a
$6.00
respectable amount of speculative development. Vancouver 6.0%
$5.00
experienced modest growth over the first half of 2012, with
psf/yr
$4.00
momentum shifting into high gear by the second half of the year. I In 4.0%
$3.00
part, the Vancouver market has benefited from the recovery in the
$2.00 2.0%
U.S. residential housing sector, while Calgary has seen an easing of
$1.00
demand conditions due to weakening oil prices and a growing gap
$0.00 0.0%
between the global benchmark Brent crude and Western Ca Canadian 2008 2009 2010 2011 2012
Select. The price gap at the time of writing stood at about $45 per
barrel. OVERALL NET RENTAL RATE OVERALL VACANCY RATE
VANCOUVER
Vancouver’s industrial sector is active with strong positive absorption,
driven primarily by the sale of strata industrial units. Tenants continue

2. CALGARY Tenants across the GTA West, who remain in a cautious mindset, are
Lower energy prices and a significant gap between the price of tending to lengthen the transaction process. Over the fourth quarter,
Western Canadian Select oil and the global benchmark Brent Crude companies did their best to manage growth and minimize capital
led to softer demand for industrial space, particularly in the fourth commitments in response to continued economic uncertainty.
quarter of 2012. Calgary also saw a reduction in large users looking Vacancy across the GTA rose marginally to 6.2% from 6.1% quarter
for space, which could open opportunities for other tenants looking over quarter. Improved U.S. economic fundamentals are expected to
for high-quality well-located space in tight market conditions. translate into stronger leasing and acquisition activity across the GTA
West markets. Development activity was active over the fourth
Speculative development in Calgary was strong through 2012, while quarter, with 1.3 msf arriving across the GTA.
vacancy remained relatively stable, rising marginally to 4.5% from
4.3% at mid-year. Of the 4.0 msf of product under construction, The GTA East market saw softer market demand over the fourth
about 1.7 msf is speculative. Although the fourth quarter saw quarter of 2012, providing an incentive for landlords to aggressively
significantly weaker demand and mildly negative absorption, tenant pursue those tenants on the street. Acquisition activity remains very
activity picked up in early 2013, providing some evidence that demand strong, though tenants here are less traditional in nature, and tend to
strength will remain respectable through the year. be more focused on supporting local communities. While the east is
active and tours are underway, tenants require greater due diligence
EDMONTON and transactions remain tough to close.
Edmonton’s industrial market remained active over the fourth
Land remains a hot commodity across the GTA, as buyers try to
quarter, although demand conditions tend to lag Calgary by a couple
position themselves within a recovering construction cycle and
of quarters, so an easing of activity due to softer oil prices is generally
ensure they have sizeable sites to meet long-term demand
expected. However, Edmonton’s proximity to Fort McMurray helps
requirements in a market that is currently devoid of larger options.
to moderate the pace of change due to the huge capital-intensive oil
sands projects underway. Land sales have remained brisk -- a strong MONTREAL
indicator of more development activity to come. The outlook for The Montreal market softened over the fourth quarter, with
industrial demand in Alberta’s capital city is closely tied to the health absorption slipping into negative territory for the first time since Q4
of the energy industry. 2010. Although momentum has eased, there is still significant activity
CENTRAL CANADA being generated by companies that are seeking modern, efficient
Generally, Canadian industrial markets have had a difficult time facilities that are designed specifically for their manufacturing or
recovering from global recession and ensuing U.S. economic distribution needs. Although there are significant availabilities, the
slowdown. While tenants remain cautious, Ontario’s industrial desire to maximize productivity and profitability is driving the demand
markets are beginning to benefit from accelerating U.S. recovery, as for modern or upgraded design-build facilities. Bombardier, which is
evidenced by positive absorption in the GTA in the latter half of headquartered in Montreal, recently completed a 15-year lease
2012. transaction in a soon-to-be modernized 300,000-sf facility at 2345
Boulevard des Sources.
One of the few bright lights has been the expansionary demand
driven by the growth in distribution facilities supporting the expanding OTTAWA
retail sector in Canada. Large U.S. retail companies are establishing Ottawa’s modest industrial market is focused on the distribution
distribution facilities, mainly in Toronto, in order to support new or sector. Vacancy held flat at 5.7% over the latter half of 2012 as a
expanded operations. Entrants such as Target and Amazon, and result of very soft but positive demand strength alongside a modest
expansions by companies such as Wal-Mart, have significantly introduction of new supply. Rental rates have been stable across 2012
contributed to the positive absorption over the past five years. and little pressure over the near term is anticipated. The government
is a dominant business driver and a major contributor to the market’s
In markets where speculative development has been repressed due to
economic growth. Although there are a few speculative projects in
economic conditions, quality product, with 28-foot-or-higher clear
pre-leasing mode, there are currently no new construction projects
heights, is in demand. A recent slowdown in demand for big box
underway. A few larger blocks of space are scheduled to return to
formats is seen as a pause due to a slowing Canadian economy and
market over the first half of 2013 and this may put some upward
protracted global uncertainty, but is expected to turn around as
pressure on vacancy over the near term.
conditions improve in the U.S.
GREATER TORONTO AREA
ATLANTIC CANADA
After experiencing weak demand over the first three quarters of
Real GDP growth was weaker than expected in New Brunswick over
2012, the GTA office market saw an increase in demand momentum
2012 with estimates at 0.8% (RBC Economics). This led to a weak
with positive absorption reaching 4.6 msf over the fourth quarter of
private labour market and the situation was worsened by a further
2012. Some of this demand was driven by the pent-up need for
drop in public-sector employment, eroding much of the jobs regained
companies to acquire and occupy space in order to meet their
since the end of the recession. The impact of the $25-billion federal
logistical and location needs over the next few years. There were a
government shipbuilding contract won by Irving Shipbuilding should
significant number of such acquisitions over the fourth quarter.
begin to fuel job and economic growth in Halifax and Nova Scotia, but
The market terms and definitions in this report are based on NAIOP standards.
Cushman & Wakefield Ltd.
33 Yonge Street, Suite 1000 No warranty or representation, express or implied, is made to the accuracy or completeness of the
information contained herein, and same is submitted subject to errors, omissions, change of price, rental or
Toronto, ON M5E 1S9 other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
www.cushmanwakefield.com/knowledge © 2012 Cushman & Wakefield, Inc. All rights reserved.

3. it is still at the initial planning stages, and any real impact on regional significant amount of available land, and this suppresses the upward
economies is not likely to be felt until the latter half of 2013 and pressure on rental rates. Moncton’s vacancy rate increased to 9.8% in
beyond. Newfoundland & Labrador continues to be the region’s the fourth quarter of 2012, up from about 7.1% at mid-year. This was
growth leader, although some reduction in oil output from offshore primarily due to the introduction of new supply, particularly in the
oilrigs is expected and this may temper near-term, pent-up demand Caledonia Business Park, and the related displacement of space as
for office and industrial space. tenants relocated into this new supply.
In Nova Scotia, the unexpected downtime at the Sable Island natural
gas project and further delay to natural gas production at Deep
ST. JOHN’S
Panuke have held back the anticipated boost in GDP growth.
However, production at the Port Hawkesbury paper mill began, with A temporary decline in GDP growth is unlikely to dampen the St.
average production late in 2012 of 935 tons per day. More than 280 John’s industrial market. Real estate activity remained strong across
employees are back to work at the mill and an additional 400 2012, with 85,000 sf of space absorbed, almost 100,000 sf of new
employees are working in the company’s woodlands. This will supply introduced and a vacancy rate that held at 6.3%. At 4.4%,
strengthen 2013 exports. Newfoundland and Labrador has the highest projected 2013 GDP
growth rate in the country, driven by a return to full oil production.
Maintenance shutdowns in Newfoundland and Labrador’s offshore oil Strong investment in the region means continued solid growth and
facilities resulted in a significant decline in crude oil production over tightening employment conditions.
the first quarters of 2012. Real GDP growth is now expected to
contract by 0.7% across 2012 (RBC Economics). It is expected that a
return to full production will mean a strong rebound in 2013, with
GDP growth forecast surging by 4.4%.
HALIFAX
Demand remained relatively weak across Halifax’s distribution-based
industrial market in the latter half of 2012, though the initialization of
VACANCY RATES
projects in support of the federal government shipbuilding contract
should mean positive job growth and stronger demand for industrial
space as we progress through 2013. The submarkets of Ragged Lake Vancouver 3.5%
and Burnside have the highest vacancy rates at 14.9% and 8.2%
Calgary 4.5%
respectively. The overall market saw vacancy fall to 7.8% from 8.5%
at mid-year. While 2012 was a story of slow growth, Nova Scotia is Toronto 6.2%
expected to see improved momentum in 2013, with real GDP growth
Ottawa 5.7%
of 1.9% (RBC Economics).
Montreal 8.6%
MONCTON
Moncton is located at the geographic centre of the Maritime Fredericton 10.9%
Provinces and is the transportation hub of the region. Driven by Saint John 22.4%
distribution companies, Moncton’s entrepreneurial market tends to
Moncton 9.8%
be the most active in eastern Canada. Demand over the latter half of
2012 was relatively strong, with overall positive absorption of in Halifax 7.8%
excess of 185,000 square feet (sf). Moncton has the luxury of a
St. John's 6.3%
The market terms and definitions in this report are based on NAIOP standards.
Cushman & Wakefield Ltd.
33 Yonge Street, Suite 1000 No warranty or representation, express or implied, is made to the accuracy or completeness of the
information contained herein, and same is submitted subject to errors, omissions, change of price, rental or
Toronto, ON M5E 1S9 other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
www.cushmanwakefield.com/knowledge © 2012 Cushman & Wakefield, Inc. All rights reserved.

4. CANADA
SUBMARKET INVENTORY OVERALL UNDER YTD CURRENT YTD WEIGHTED WEIGHTED
VACANCY CONSTRUCTION CONSTRUCTION QUARTER ABSORPTION AVERAGE NET AVERAGE GROSS
RATE COMPLETIONS ABSORPTION RENTAL RATE RENTAL RATE
Vancouver 191,434,876 3.5% 2,123,748 2,384,351 1,154,496 4,445,481 $7.84 $11.19
Calgary 110,596,036 4.5% 2,099,724 1,418,319 (117,369) 1,533,759 $8.69 $11.81
Toronto 789,003,730 6.2% 2,691,968 3,307,034 4,654,265 4,865,669 $5.05 $8.09
Ottawa 21,642,376 5.7% 64,000 47,500 15,998 184,332 $8.29 $12.79
Montreal 283,616,486 8.6% 781,000 419,500 (607,972) 2,797,351 $5.00 $8.10
Fredericton 463,925 10.9% 0 11,000 (15,718) 5,851 $7.47 $11.78
Saint John 433,031 22.4% 0 25,000 (16,600) (36,227) $6.86 $10.33
Moncton 3,618,004 9.8% 0 259,500 (33,011) 239,624 $6.00 $8.97
Halifax 7,398,544 7.8% 0 0 11,853 (58,411) $7.15 $11.44
St. John’s 3,075,255 6.3% 192,990 99,346 19,939 84,707 $9.29 $11.75
TOTALS 1,411,282,263 6.2% 7,953,430 7,971,550 5,065,881 14,062,136 $5.78 $8.91
* RENTAL RATES REFLECT ASKING $PSF/YEAR
The market terms and definitions in this report are based on NAIOP standards.
Cushman & Wakefield Ltd.
33 Yonge Street, Suite 1000 No warranty or representation, express or implied, is made to the accuracy or completeness of the
information contained herein, and same is submitted subject to errors, omissions, change of price, rental or
Toronto, ON M5E 1S9 other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
www.cushmanwakefield.com/knowledge © 2012 Cushman & Wakefield, Inc. All rights reserved.

5. MARKET HIGHLIGHTS
Significant 2012 Lease Transactions MARKET SUBMARKET TENANT/BUYER SQUARE FEET
James Snow Parkway Greater Toronto Area Milton Lowe’s 630,000
11900 18th Street NE Calgary North East Walmart 436,214
80 de l’Aeroport Montreal Bromont Pioneer Wind Energy Systems 361,643
2345 Sources Boulevard Montreal GMA West Mobilia Inc. 293,375
25 Cottrelle Boulevard Greater Toronto Area Brampton NFI Logistics 230,000
7659 Bramalea Road Greater Toronto Area Brampton Sherway Warehousing Inc. 197,337
450 Derwent Place Vancouver Delta Amazon Canada Fulfillment Services 193,494
Significant 2012 Sale Transactions MARKET SUBMARKET BUYER PURCHASE PRICE SQUARE FEET
16131 & 16133 Blundell Road Vancouver Richmond Pure Industrial Real Estate Trust $102,460,000 927,351
th th
7008 5 Street SE, 6810 6 Street SE, 6812 Calgary East Fairview Industrial Twofer (GP) Inc. $75,406,000 617,718
6th Street SE
7510 5th Street SE, 7610 5th Street SE. 7710 Calgary Airways Industrial Twofer (GP) Inc. $45,127,000 327,660
5th Street SE
Kingswood Industrial Vancouver Richmond Pure Industrial Real Estate Trust $44,000,000 416,000
101 & 201 Innes Park Way Ottawa Sheffield Industrial The Standard Life Assurance Company $29,900,000 248,009
Park
Lake City Court 1 & II Vancouver Burnaby N/A $26,500,000 260,934
1120-1128 Old Innes Road & 1230 Old Innes Ottawa Sheffield Industrial The Standard Life Assurance Company $24,000,000 205,201
Road Park
7504 30th Street SE; 3916 61st Ave SE Calgary Foothills Industrial Twofer (GP) Inc. $18,225,000 238,707
Significant 2012 Construction Completions MARKET SUBMARKET MAJOR TENANT COMPLETION DATE SQUARE FEET
8450 Boston Church Road Greater Toronto Area Milton Cooper Construction Limited Q4 2012 1,320,000
16111 Blundell Road Vancouver Richmond Acklands Grainger Q4 2012 275,000
16100 Portside Road Vancouver Richmond Tolco Corp. Q4 2012 250,000
1400 Church Street South (expansion) Greater Toronto Area Pickering Aspect Retail Logistics Q3 2012 200,000
1865 Clements Road Greater Toronto Area Pickering First Gulf Corporation Q3 2012 190,000
19358 24th Avenue (CHBP) Vancouver Surrey SPEC Q4 2012 145,540
Shoreline Business Centre – Phase II Vancouver Vancouver SPEC Q3 2012 133,203
10720 25th Street NE Calgary North East Hopewell Development Corporation Q4 2012 96,200
Glenwood Business Park – Bldg 6 Vancouver Burnaby SPEC Q3 2012 90,615
Significant Projects Under Construction MARKET SUBMARKET MAJOR TENANT ANND/OR DEVELOPER COMPLETION DATE SQUARE FEET
Crosspointe Industrial Park (Bldgs A to C) Calgary Balzac Hopewell Development Corporation Q4 2014 1,658,715
Great Plains (Bldgs 1-3) Calgary South East WAM Development Group Q1 2013 1,087,950
100 Ironside Road Toronto Brampton Blackwood Partners Inc. Q1 2013 728,141
Stoney Industrial Building (Bldgs 5&6) Calgary North WAM Development Group Q4 2012/Q1 716,224
2013
Airport Trail Business Park (Bldgs 1-4) Calgary North Enright Capital Ltd. 2012-2013 568,750
Starfield Logistics Centre Calgary South East HOOPP / Triovest 2012-2013 555,800
7995 Winston Churchill Toronto Brampton Orlando Corporation Q2 2013 520,736
The market terms and definitions in this report are based on NAIOP standards.
Cushman & Wakefield Ltd.
33 Yonge Street, Suite 1000 No warranty or representation, express or implied, is made to the accuracy or completeness of the
information contained herein, and same is submitted subject to errors, omissions, change of price, rental or
Toronto, ON M5E 1S9 other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.
www.cushmanwakefield.com/knowledge © 2012 Cushman & Wakefield, Inc. All rights reserved.