‘A place we want to be’: Toronto’s CanFirst to build up to 900,000 square feet of industrial space in Barrhaven

A Toronto-based commercial real estate firm is poised to add to Ottawa’s industrial footprint after acquiring a 50-acre parcel of land near the Amazon fufilment centre in Barrhaven. CanFirst Capital Management bought the property in the city’s southwest corner in late September for $45.8 million. The firm says it plans to build up to 900,000 square feet of warehousing space on the land, which is located at Strandherd and Citigate drives, just east of Highway 416 and down the road from Amazon’s 2.8-million-square foot distribution facility that opened last year. CanFirst executive vice-president Mark Braun said the company was angling to get back into the booming Ottawa industrial market after selling its previous 415,000-square-foot portfolio of 23 office and light industrial buildings in the capital in the spring of 2020. Braun said the firm “looked at a zillion different properties” over the past couple of years. But the deals never materialized for a variety of reasons, he explained – sometimes CanFirst was outbid, while in other cases the timing wasn’t quite right or the firm ultimately determined the assets didn’t fit into its long-term plans. “We always wanted to be in Ottawa, and we’ve always wanted more industrial (space),” Braun told OBJ this week. “It just hasn’t happened for us.” Ottawa-based Colonnade BridgePort will be CanFirst’s development partner on the project, overseeing the construction, leasing and management of the buildings. Braun said the firms are working through the zoning and site plan approval process and hope to have shovels in the ground by late next year, with the first phase of the project targeted for completion in 2024. About 44 acres of the property, which will be bisected by an extension of Citigate Drive, will be usable for development, Braun said. While details are still being hammered out, he said the project will likely include two to four mid- and large-bay buildings with ceiling heights of 36 to 40 feet suitable for a range of tenants, from e-commerce and logistics firms to traditional manufacturers and even tech companies. “We’d be targeting everyone,” Braun said, noting the site could be a good fit for a data centre to accommodate growing demand for cloud storage servers.

E-commerce distribution hub

CanFirst is the latest company seeking to capitalize on the National Capital Region’s tight industrial market. Despite a slight uptick in the industrial availability rate last quarter, demand for warehousing space in Ottawa continues to outpace supply. With e-commerce and logistics powerhouses like Amazon now touting the region as a valuable distribution hub thanks to its close proximity to major markets like Toronto and Montreal, a lack of available development land has pushed rents to record highs as tenants scramble to snap up whatever vacant warehouse space they can find. And that’s in what’s already a relatively small industrial market to begin with. According to CBRE, Ottawa has 35.9 million square feet of space available for rent in an urban area of about one million residents, compared with more than 140 million square feet in similar-sized cities such as Calgary and Edmonton. While Ottawa will never be a manufacturing hub, Braun said he sees plenty of other opportunities for growth in its industrial sector. Despite economic headwinds such as rising interest rates that have driven up cap rates, he said CanFirst continues to scope out other potential properties in the region. “From a logistics and e-commerce perspective, there’s going to be a need going forward for more industrial warehousing space,” he said. “Just for that alone, we like Ottawa. But in the longer-term picture, Ottawa is a big, growing city. It’s a place that we want to be.”