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Construction of Amazon’s new Ottawa distribution centre has yet to officially begin, but the developer behind the project is already fielding inquiries from businesses interested in setting up shop near the massive facility.
Broccolini, which will construct the one-million-square-foot facility and lease it to Amazon, says there are signs that new coffee shops, restaurants and truck service centres will be constructed to service the 600 full-time Amazon employees working at the facility as well as the steady stream of transport truck traffic.
“Already I’m hearing rumblings and getting phone calls about developments occurring within the vicinity,” said James Beach, Broccolini’s director of real estate and development, speaking on the Ottawa Real Estate Show.
The developer is currently clearing the land on its 96-acre property at the interchange of Highway 417 and Boundary Road in advance of starting construction on the distribution centre this summer.
Broccolini says the project is expected to cost up to $200 million and will be completed by the fall of 2019.
Construction of the distribution centre – which will specialize in packing and shipping large items such as household furniture and decor, sporting equipment and gardening tools – comes as Ottawa’s industrial market continues to tighten.
The availability rate of industrial space has declined for 12 straight quarters and is approaching record lows, real estate services firm CBRE recently reported. At the end of the first quarter, the availability rate stood at 4.3 per cent.
While tenants looking for between 2,000 and 10,000 square feet of industrial space can still find options, securing large warehouse premises of more than 30,000 square feet is becoming difficult – a situation CBRE said could encourage developers to launch speculative builds.
Beach said he’s seen no indication that the Amazon distribution centre will be a catalyst for more large-scale industrial developments in southeast Ottawa.
However, Shawn Hamilton, managing director of CBRE Ottawa, noted that the shortage of industrial land means developers will have to look at areas outside the Greenbelt to support the growth of Ottawa’s warehousing, distribution and logistics sector.
“Over the passage of time, Boundary Road could certainly become more than it is today,” he said.