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Sound Fundamentals, E-Commerce and Innovation Drive Rapidly Evolving North American and European Industrial SectorsTORONTO, May 10, 2018 /PRNewswire/ -- Avison Young releases its Spring 2018 North America and Europe Industrial Market Report Sound fundamentals, the logistics requirements of e-commerce, and innovations in building design and utilization continue to drive the rapid evolution of the industrial property sector across North America and Europe. An undersupply of available space remains a central issue in most markets, and developers have responded with notable new construction to anticipate occupiers' growing needs. Major online players are altering the supply chain, and new technologies and innovations are determining how, where and what type of industrial product is being built. Meanwhile, the needs of big data and the cannabis industry (in some markets) are adding to an already crowded playing field. Unknown factors potentially impacting the sector - and the global economy in general - include geopolitical changes such as the renegotiation of NAFTA and the U.K.'s exit from the European Union. These are some of the key trends noted in Avison Young's Spring 2018 North America and Europe Industrial Market Report, released today. The report covers the industrial markets in 59 North American and European metropolitan regions: Calgary, Edmonton, Halifax,Lethbridge, Montreal, Ottawa, Regina, Toronto, Vancouver, Waterloo Region, Winnipeg, Atlanta, Austin, Boston, Charleston,Charlotte, Chicago, Cleveland, Columbus, OH; Dallas, Denver, Detroit, Fort Lauderdale, Greenville, Hartford, Houston,Indianapolis, Jacksonville, Las Vegas, Long Island, Los Angeles, Memphis, Miami, Minneapolis, Nashville, New Jersey,Oakland, Orange County, Orlando, Philadelphia, Phoenix, Pittsburgh, Raleigh-Durham, Reno, Sacramento, San Antonio, San Diego County, San Francisco, San Jose/Silicon Valley, San Mateo, St. Louis, Tampa, Washington, DC; West Palm Beach, Mexico City, Coventry, U.K.; London, U.K.; Manchester, U.K.; and Bucharest, Romania. "Today, I am pleased to share with you Avison Young's insights into the robust industrial market - the commercial real estate sector's hottest asset class," comments Mark E. Rose, Chair and CEO of Avison Young. "These insights are drawn from our annual industrial survey, spanning 59 markets across five countries and two continents, with a combined industrial stock of more than 14 billion square feet (bsf)." He continues: "The push to find cost-effective solutions for same-day or next-day delivery to consumers is continuously challenging the retail sector - and, by association, the industrial sector, which frankly are becoming more intermingled than ever before. Although e-commerce sales make up only a small, but rapidly growing, fraction of overall retail sales, stakeholders looking to service the retail sector are thinking long-term. Strong demand is reflected in declining vacancy rates which, by the way, are at or approaching historic lows in many markets and countries, leading to rising rental rates for industrial space. This situation has increased asset values - a fact that has made industrial assets hot commodities among investors and users as well as occupiers." "Confidence in the long-term viability of the industrial sector and e-commerce has recently been demonstrated not only by the sheer leasing velocity and demand for space, but also by some notable M&A activity, such as the all-cash transaction valued at C$3.8 billion, including debt, between Blackstone and PIRET earlier this year in Canada, as well as a recently announced merger agreement in which Prologis will acquire DCT and its 71 million square feet (msf) of real estate in a US$8.4-billion stock transaction, including the assumption of debt, in the U.S.," says Rose. According to the report, of the 59 industrial markets surveyed by Avison Young across North America and Europe, vacancy declined in 38 markets, remained unchanged in three, and increased in 18 during the 12-month period ending March 31, 2018. The analysis also revealed that, with demand in most markets outpacing new supply, the development of new product has escalated. Nearly 235 msf was completed across all markets surveyed by Avison Young in the 12 months ending with the first quarter of 2018 - an increase of more than 5 msf compared with the prior 12-month period. Meanwhile, the amount of space under construction increased more sharply, jumping more than 13 msf year-over-year to nearly 234 msf. CANADA "Canada's industrial market is performing well beyond expectations, and although absorption levels vary from city to city, the industrial market's increasingly strong link to the retail sector - specifically e-commerce - remains a key catalyst for growth," says Bill Argeropoulos, Principal and Practice Leader, Research (Canada) for Avison Young. "As a result, large-format distribution/fulfilment centre space is desirable, but scarce. Meanwhile, the overall industrial sector remains challenged by rising land costs, including soaring development charges, and dwindling supply of developable land in some markets." Argeropoulos continues: "The sector's encroachment on urban centres - to shorten last-mile delivery - and associated high costs may prompt landlords in Canada to follow the trend seen elsewhere and build multi-storey facilities that better fit into tighter infill markets. Innovative developers will ultimately transform the supply chain by thinking outside of the traditional warehouse box as stakeholders aim to future-proof their assets." Notable First-Quarter 2018 Canadian Industrial Market Highlights:
Argeropoulos adds: "The U.S. administration's desire to revamp NAFTA and introduce protectionist trade policies has the potential to create headwinds for Canada's industrial market and the economy in general. For now, the industrial market is expected to operate at or near capacity until new supply catches up with demand." U.S. "Developers are seeking to meet strong tenant demand by creating the most efficient product possible through innovation and technology," states Earl Webb, Avison Young's President, U.S. Operations. "Land constraints have supported innovative construction, such as multi-storey development, and technology solutions in supply and distribution logistics. E-commerce and consumer demand for ever-shorter delivery windows as well as ever-growing data-centre requirements have strained industrial markets in the country's population centres." "The industrial sector continues to be a darling asset class in the capital markets," adds Erik Foster, Avison Young Principal and Practice Leader of the firm's industrial capital markets group. "Because of the solid leasing fundamentals, low vacancies and a lack of available institutional-quality product in most major markets, capital spending in the development space is one of the primary means for investors to gain equitable returns given the certainty of lease-up." Notable First-Quarter 2018 U.S. Industrial Market Highlights:
Please turn to the following pages of the report for local market highlights. For comments on individual markets, please contact the Avison Young representatives listed below. Thank you. pp.4-5 Canada & U.S.: Canada p.14 Edmonton p.15 Halifax p.16 Lethbridge p.17 Montreal p.18 Ottawa p.19 Regina p.20 Toronto p.21 Vancouver p.22 Waterloo Region p.23 Winnipeg United States p.26 Austin p.27 Boston p.28 Charleston p.29 Charlotte p.30 Chicago p.31 Cleveland p.32 Columbus, OH p.33 Dallas p.34 Denver p.35 Detroit p.36 Fort Lauderdale p.37 Greenville p.38 Hartford p.39 Houston p.40 Indianapolis p.41 Jacksonville p.42 Las Vegas p.43 Long Island p.44 Los Angeles p.45 Memphis p.46 Miami p.47 Minneapolis p.48 Nashville p.49 New Jersey p.50 Oakland p.51 Orange County p.52 Orlando p.53 Philadelphia p.54 Phoenix p.55 Pittsburgh p.56 Raleigh-Durham p.57 Reno p.58 Sacramento p.59 San Antonio p.60 San Diego p.61 San Francisco p.62 San Jose/Silicon Valley p.63 San Mateo p.64 St. Louis p.65 Tampa p.66 Washington, DC p.67 West Palm Beach Mexico United Kingdom p.72 London p.73 Manchester Romania Avison Young is the world's fastest-growing commercial real estate services firm. Headquartered in Toronto, Canada, Avison Young is a collaborative, global firm owned and operated by its principals. Founded in 1978, the company comprises 2,600 real estate professionals in 84 offices, providing value-added, client-centric investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial, multi-family and hospitality properties. Editors/Reporters • Please click on link to view Avison Young's Spring 2018 North America and Europe Industrial Market Report: https://avisonyoung.uberflip.com/i/979259-ayspring18namericaeuropeindustrialreportmay10-18final For further information/comment/photos: • Sherry Quan, Principal, Global Director of Communications & Media Relations, • Bill Argeropoulos, Principal and Practice Leader, Research (Canada), Avison Young: • Margaret Donkerbrook, Principal and Practice Leader, U.S. Research, • Mark Rose, Chair and CEO, Avison Young: 416.673.4028 • Earl Webb, President, U.S. Operations, Avison Young: 312.957.7610 Avison Young is a 2018 winner of the Canada's Best Managed Companies Platinum Club designation, having retained its Best Managed designation for seven consecutive years. Follow Avison Young on Twitter: For Avison Young listings and deals: http://www.twitter.com/AYListingsDeals Follow Avison Young Bloggers: http://blog.avisonyoung.com Follow Avison Young on LinkedIn: http://www.linkedin.com/company/avison-young-commercial-real-estate Follow Avison Young on YouTube: http://www.youtube.com/user/AvisonYoungRE Follow Avison Young on Instagram: http://www.instagram.com/avison_young_global Media Relations: Sherry Quan, +1-604-647-5098; +1-604-726-0959 cell, email: [email protected] 
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