The Charter of the French language and its regulations govern the consultation of English-language content.

West Island Industrial Real Estate in the Current Canadian Economy

An article by John Burrascano, Industrial Commissioner, PME MTL Ouest-de-l'Île.

Montreal’s industrial real estate market, which was in a state of stagnation for many years, has exploded since 2016 and promises to be hot for at lease another 12-18-months. This, while the general Canadian, Québec, and most world economies strive for improvement and growth.

A Glimpse of the Overall Economic and Pandemic Picture

Benoit Durocher1 says that in the third quarter of 2021, Canada posted a better than expected real GDP rate, rising 5.4 percent (quarterly annualized). As COVID-19 restrictions were lifted for many sectors of the economy during the summer months of the year, consumers began spending again, especially for accommodations and food-related services. In fact, consumer spending is considered to have contributed greatly to the growth of the economy in the third quarter.

Though the overall world economy has improved over the last few quarters, we have not seen the end of the COVID-19 crisis, which continues to impact the economy.  

For a better sense of what expectations are in terms of economic recovery and performance, provided below is a table of forecasted real GDP growth rates for selected areas:

There is a clear projection decrease in economic growth between now and 2023. The unknown variants that could arise pose a significant ongoing risk to both the global and Quebec economies, and there are many hurdles to overcome before a full recovery is achieved.

Le Mouvement Desjardins2 indicates that for 2021, Québec posted 6.3 percent growth in real GDP. That is the best performance in Canada. Because of public health restrictions, however, Québec’s economy is expected to slow down in the first half of 2022.

The unknown variants that could arise pose a significant ongoing risk to both the global and Quebec economies, and there are many hurdles to overcome before a full recovery is achieved.

There continues to be disruption when it comes to the supply chain, including holding back manufacturing, raising international merchandise shipping costs and inefficiencies. In addition, there are significant increases in oil, natural gas and commodity prices have elevated inflation rates on a worldwide scale. Le Mouvement Desjardins3 elaborates that inflation poses a serious problem for the US economy over the short-term. For Canada, in October 2021, its rate of inflation hit 4.7 percent, a rate unseen since 2003, which is expected to peak in upcoming months and then begin to progressively decrease. In the province of Québec, inflation has gradually risen since the beginning of 2021 and is accelerating at a quicker pace than in Canada as a whole, but is expected to decrease a little during 2022, from 3.8% in 2021 to a forecasted 3.2% in 2022.

Expectations are that the province of Québec’s real GDP growth rate will be weaker in 2022. The re-opening of the services sector will help the overall Québec economy but supply chain issues related to inventories will negatively affect consumer demand for key goods such as, the hard-hit automobile industry, certain appliances, and electronics. More expensive housing prices and expected higher interest rates will dampen demand for housing, further explaining the anticipated slower Québec economy in 2022.

In January 2022, the Bank of Canada did not raise the lending rate, but intends to do so on four or five occasions over the course of the year.

The Pandemic and Industrial Building Market in Montréal and the West Island

Investors and users of industrial buildings are still having a difficult time finding proper facilities to do business and those who are lucky enough to find such space are paying very high prices to lease or buy.

Latest indications are that demand for industrial space from users and investors is not slowing and expectations are that this level of demand will persist for another 12 months at least. According to CBRE4, users must begin looking for space 2 to 3 years in advance of a relocation. The leading demand for industrial space continues to come from the e-commerce, logistics, 3PL, and food and beverage businesses.

It has been acknowledged that in view of lacking supply and higher pricing of industrial product, much attention has shifted to more peripheral areas of Montréal, particularly the South Shore. The expectation is continued demand will outpace supply for industrial space over the medium-term.


Colliers International5 states that the short supply of existing industrial space has resulted in an average asking net lease rate of $9.23 per square foot in the Greater Montréal Metropolitan Area in the fourth quarter of 2021. This price is an average across all types of leasable industrial space. If we consider the West Island, excluding Lachine, the average net rental rate is $10.95 per square foot. For Lachine it is $7.69 per square foot.

In terms of average asking sale price, the same report indicates that in Q4, 2021, an industrial building having clear height of less than 18 feet cost $146.00 per square foot to buy in Montréal; for 18-24 feet clear it was $204.00 per square foot; and, for a building of 24+ feet clear the cost was $221.00.

Industrial land prices continue to rise in the West Island.

Vacancy Rates

In the fourth quarter of 2020, the industrial vacancy rate for the West Island was 1.0 percent6. By the fourth quarter of 2021, the rate fell to .7 percent.

For Lachine, it had a vacancy rate of 1.5 percent in fourth quarter of 2020, which rose a tad to 2.0 percent in the fourth quarter of 2021.

As a point of reference, the vacancy rate for the Greater Montreal Metropolitan Area for the fourth quarter of 2021 was .8%.


The pandemic has contributed towards the good performance of Montréal’s industrial market over the last two or so-year period, accelerating explosive demand for on-line goods translating into the need for more warehousing, distribution, and transport-related space.

In view of lacking industrial space in Montréal and the West Island and correlated higher rental and purchase pricing, noticeable attention is now given to industrial product and land in more peripheral areas by users and investors. Some relief is found in the completion of new industrial construction projects currently underway and coming ones as developers now attempt to secure land throughout the Greater Montréal Metropolitan Area.

Recently forecasted statistics indicate that real GDP growth rates for the United States, Canada, Quebec, and selected other jurisdictions show a tendency toward lower economic vibrancy between 2021 and 2023.


CBRE, 2021. “Too little construction breaking ground”. Marketview-Montréal Industrial, Q2, 2021

Mouvement Desjardins, 2022. “Many Economies Have Slowed Because of Omicron but Inflation Will Remain High for the Foreseeable Future”. Economic & Financial Outlook. Economic Studies-Desjardins

Mouvement Desjardins, 2021. “Strong Inflation, Supply Issues and New Pandemic Fears: Major Uncertainties Heading into 2022”. Economic & Financial Outlook. Economic Studies-Desjardins

CBRE, 2021. “Too little construction breaking ground”. Marketview-Montréal Industrial, Q2, 2021

Colliers International, 2021. Montréal Industrial Market Report. Q4, 2021

Colliers International, 2020.  Greater Montréal Area Industrial Market Report, Q4, 2020


1675, Transcanadienne

Bureau 301

Dorval, Québec, H9P 1J1

514 426-2888
Follow us