The Ottawa company in charge of developing and leasing a four-building industrial park near Amazon’s warehouse in Barrhaven says it expects a flood of calls from potential e-commerce and logistics tenants eager to capitalize on the city’s close proximity to major markets.
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The Ottawa company in charge of developing and leasing a four-building industrial park near Amazon’s warehouse in Barrhaven says it expects a flood of calls from potential e-commerce and logistics tenants eager to capitalize on the city’s close proximity to major markets.
Colonnade BridgePort is overseeing the leasing, construction and management of the Gateway Industrial Park, which will be located on a 50-acre site near the intersection of Strandherd and Citigate drives. The property is just south of Amazon’s 2.8-million-square-foot fulfilment centre that opened in late 2021.
Scott Craven, Colonnade BridgePort’s director of industrial leasing, said the property’s prime location just east of Highway 416 and a five-minute drive from Highway 417 makes it a highly coveted site for e-commerce distributors, logistics firms and the like that are looking to quickly get merchandise into the hands of consumers.
“They’re not building any more land, and this site is one of the last in the region that has access to the 416, the 417 as readily as it does,” Craven said. “The market needs more of this type of stuff, and we’re happy to provide it.”
Colonnade BridgePort will manage the project on behalf of Toronto’s CanFirst Capital Management, which bought the land last year for $45.8 million.
“Our investment in this land and this development shows our confidence in Ottawa and in the growth of Ottawa’s industrial market,” CanFirst executive vice-president Mark Braun said in a statement.
Plans call for four buildings ranging from 150,000 to 220,000 square feet, for a total of up to 900,000 square feet of industrial space. Craven said the development will feature 32-foot-clear ceilings and is aiming to be carbon-neutral.
The first building, which will be about 224,000 square feet, will be located on the northwest corner of the property. Initial site preparation is expected to start this summer, Craven said, and the firm hopes to have shovels in the ground this fall so the building can be ready for occupancy next summer.
The three additional buildings will likely be constructed every “nine, 10, 11 months thereafter,” depending on demand, he said.
“But if somebody wants it tomorrow, we’ll deliver it sooner,” Craven added.
The new complex is just the latest in a string of major industrial builds in Ottawa’s south end over the past few years.
Amazon, for example, has leased nearly four million square feet of space at two new distribution facilities in Barrhaven and Boundary Road. Ottawa’s Avenue 31 is constructing several buildings at its National Capital Business Park near Hunt Club Road and Highway 417, which is expected to span up to 1.3 million square feet by the time it’s finished.
Even with that additional supply, surging demand has pushed rents to record highs as tenants thirst for more modern, class-A warehouse space in a market where the average industrial building is 39 years old.
According to CBRE, average net rents rose to a record $13.61 in the fourth quarter of 2022, even as the city’s availability rate ticked up to 2.6 per cent. Meanwhile, 30 per cent of the 400,000 square feet of industrial space in the construction pipeline at that point had already been pre-leased.
“People have woken up to the fact that we’re pretty close to a lot of places – more so than the Toronto and Montreal markets,” said Craven. “For the logistics guys, every mile counts. If they can get their drivers in and out in a day, that’s huge. And we can hit great big markets within a day’s drive.”
According to Colonnade BridgePort’s marketing brochure for the Gateway Industrial Park, there are 18 million people within a 400-kilometre radius of Ottawa, compared with 14 million within the same radius of Toronto and 10 million the same distance from Montreal.
Craven said the new industrial park should also benefit from the “Amazon effect” as other logistics companies look to cash in on the same advantages as the global e-commerce giant.
“There’s a reason Amazon (decided) to locate there,” he said. “And we think that last-mile guys and like-minded companies will go, ‘Well, they kind of figured it out.’ We think there’s going to be a benefit for sure to being adjacent to them.”
Six million square feet of new industrial projects are now in the planning stages across the city as developers scramble to meet demand, Colliers International said in its fourth-quarter market report.
But Craven said Ottawa still lags far behind other major Canadian cities when it comes to quality, high-bay warehouse space.
“I don’t see demand diminishing at all for the next five years at least,” he said. “Tenants that want to make the next jump will be looking to (lease) the new stuff.”
