Greater Montreal Area Industrial Market Report

Q4 2020

Net Absorption (SF) MARKET OUTLOOK

This Quarter Previous Quarter Montreal’s industrial market has proved to be Several significant lease transactions that incredibly resilient over the past 12 months. took place in Q4 2020 included Metro 142k SF 640k SF At its very onset, the pandemic posed an Logistics, a third-party logistics company imminent threat to the commercial real securing 80,000 SF in the West Island while 12-Month Absorption estate industry. Both office and retail Artika, a home décor company expanded and markets saw a decline in market activity took occupancy of 60,750 SF in Lachine. 1.5M SF while the industrial sector saw a surge in demand. Summit REIT recently acquired 50% of Montoni’s industrial portfolio for $88 million. Availability As the work from home environment was The sale included 12 properties throughout quickly embraced, the e-commerce industry the Greater Montreal Area. The average price This Quarter Year-over-Year saw an increase in demand as shopping per SF has increased from Q3 to Q4 2020 2.0% 130 bps shifted from in-store towards online. Some reaching $117.00 PSF. companies have had to expand their requirement for space to meet the increase Although no new supply was delivered in Q4 Asking Net Rent in demand for their products. In July, 2020. There are several developments This Quarter Year-over-Year Amazon opened its first distribution center in currently under construction including 3500 Lachine and continues to be active in the F.X.-Tessier Street located in Vaudreuil $ % 7.21 PSF 5.5 marketplace as it looks to further expand into totaling 350,000 SF which is expected to be Quebec to service the high volume of orders delivered in Q2 2021. in the region. It has been a challenging year for the Development/Sales Low industrial availability and very little new Montreal real estate market, however the Under Construction New Supply supply coming to market throughout 2020 higher demand for space from e-commerce have pushed asking net rental rates upwards users has led to strong growth throughout 2.8M SF 0 SF to $7.21 PSF in Q4 2020, reflecting an the year leading to speculation that the increase year-over-year of 5.5%. Availability momentum will continue in the new year. Sale Price (avg.) rate remains tight dropping to a record low With news of a COVID-19 vaccine being of 2.0%. With limited options, existing approved and distribution underway, it is $117 PSF industrial space configured with high clear paving the way for a good start for 2021. heights are trading above $8.50 PSF.

Accelerating success. collierscanada.com/research Greater Montreal Area Overview

Rental Rates by Submarket Rental Rate Growth 01 Weighted Average Asking Net Rates ($PSF) 02 By Market | Q4 2019 – Q4 2020 Q4 2020 Q3 2020 -5% % 5% 10% 15% 20% 25% 30% 35%

$10 West Island -1% $8 Vaudreuil-Salaberry 26% $6 Lachine 31% St-Laurent 1.2% $4 Midtown 1% $2 North Shore 18% $0 East Island 19% South Shore 15%

*Decrease in rental rates is reflective of the lack of quality space.

Under Construction by Market Availability Rate 03 Total Square Feet 04 By Market | Q4 2019 – Q4 2020

1,600,000 1.7% 5.1% 2.3% 2.1% 1,400,000 1,200,000 West Island Vaudreuil-Salaberry Lachine St-Laurent 1,000,000 2.8 % Q4’19 13.5 % Q4’19 5.2 % Q4’19 3.8 % Q4’19 800,000 600,000 400,000 200,000 2.5% 1.0% 3.2% 1.0% - Vaudreuil- North Shore South Shore East Island Midtown North Shore East End South Shore Salaberry 4.5.% Q4’19 2.0 % Q4’19 2.7 % Q4’19 2.6 % Q4’19 SF 1,047,000 1,400,978 390,000 60,000

Historical Market Overview Availability Rate Vacancy Rate Net Absorption 05 Availability Rates, Vacancy Rates and Net Absorption

2,000 8.0%

1,500 6.0% Availability / Vacancy Rate

1,000 4.0%

500 2.0%

0 0.0% Net Absorption (thousands SF) (thousands Net Absorption -500 -2.0%

-1,000 -4.0% Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

Colliers Canada | GMA Industrial Report | Q4 2020 collierscanada.com/research P.2 Greater Montreal Area Market Statistics Avg. Asking Asking Avg. Total Vacant Vacant Total Space* Rate Vacancy Rate Vacancy Quarter Previous Absorption Net Current* Absorption Net YTD* Available Total Space* Availability Rate Availability Rate Quarter Previous Wgt Rent** Net

West Island Baie D’Urfe 84,191 1.9% 3.3% 59,518 -69,237 151,191 3.4% 4.8% $8.50 Ste-Anne-de-Bellevue 0 0.0% 0.0% 0 0 0 0.0% 0.0% $6.50 DDO 39,950 2.0% 0.4% -31,480 -31,480 55,857 2.8% 0.4% $5.25 Dorval 105,292 0.7% 0.8% 18,570 166,727 235,363 1.6% 2.0% $8.97 Kirkland 9,908 0.4% 0.3% -1,908 0 55,183 2.2% 1.1% $5.68 Pointe-Claire 172,446 1.0% 1.1% 24,070 -15,877 247,267 1.4% 1.8% $6.14 Total 411,427 1.0% 1.1% 68,770 50,133 744,861 1.7% 2.0% $7.32

Vaudreuil-Salaberry Total 164,795 4.2% 2.4% -25,054 8,002 200,746 5.1% 4.4% $8.94

Lachine Total 305,298 1.5% 1.5% 1,228 35,777 488,417 2.3% 2.7% $7.24

St-Laurent Total 854,698 1.5% 1.3% 59,835 172,949 1,222,829 2.1% 2.1% $6.97

Midtown LaSalle 429,323 4.2% 4.7% 48,353 -173,654 436,530 4.3% 6.7% $9.52 Montreal 900,521 1.3% 1.4% -12,988 -55,026 1,430,331 2.0% 1.9% $6.53 TMR 225,880 2.3% 2.0% -4,766 144,252 392,612 4.1% 2.1% $6.00 Total 1,555,724 1.7% 1.9% 30,599 -84,428 2,259,473 2.5% 2.4% $7.34

North Shore Laval 310,916 0.9% 0.8% -22,435 281,417 575,579 1.6% 1.0% $8.08 North Shore 49,873 0.2% 0.4% 48,926 148,369 52,939 0.2% 0.5% $8.83 Total 360,789 0.6% 0.6% 26,491 429,786 628,518 1.0% 0.8% $8.18 Featured Transactions | Q2 2019 East End Anjou 180,833 1.1% 1.0% -11,586 278,349 222,207 1.3% 2.8% $7.80 Montreal-Est 750,688 5.4% 5.1% 207 86,160 787,936 5.7% 6.4% $7.19 St-Leonard 290,485 2.7% 1.7% -104,339 -210 299,713 2.8% 2.1% $6.61 Total 1,222,006 2.9% 2.6% -115,718 364,299 1,309,856 3.2% 3.8% $7.15

South Shore

St-Hubert 61,476 1.0% 0.9% -5,651 326,684 86,202 1.4% 1.0% $8.50 Longueuil 12,688 0.1% 1.0% 83,132 142,133 66,580 0.6% 1.1% $6.84 Boucherville*** 66,613 0.4% 0.6% 27,161 75,867 177,747 1.1% 1.7% $7.92 Brossard 9,326 0.3% 0.0% -7,939 3,261 23,913 0.7% 0.9% $10.12 Total 150,103 0.4% 0.7% 96,703 547,945 354,442 1.0% 1.3% $8.20

GMA Total 5,024,840 1.4% 1.4% 142,854 1,524,463 7,209,142 2.0% 2.1% $7.21

***Inventory includes buildings in rezoned area *Square Feet **Per Square Foot

Colliers Canada | GMA Industrial Report | Q4 2020 collierscanada.com/research P.3 Transaction Highlights

Notable Lease Transactions Address Submarket Tenant Transaction Type Size (SF)

550 McArthur St-Laurent Daher Aerospace Canada Inc. New Lease 156,514 th 1700 50 Avenue Lachine Artika For Living Inc. Renewal 94,569 1325 Hymus Boulevard West Island Metro Canada Logistics New Lease 80,000 th 1805 50 Avenue Lachine Artika For Living Inc. New Lease 60,750 9341-9395 Cote-de-Liesse West Island 9354-8444 Quebec Inc. Renewal 31,801 1290 de la Gare Avenue North Shore DMB Alimentaire New Lease 30,095

Notable Sale Transactions Address Submarket Purchaser Price Price/SF Size (SF) 550 McArthur Street St-Laurent Mondev $17,325,000 $111.00 156,514 5660 Ferrier Street Midtown 12394634 Canada Inc. $11,275,000 $128.00 87,803 Investissements 551 Beriault 8520 Jarry Street East Anjou $8,750,000 $107.00 81,473 Investments Limited 2005 Le Chatelier Street North Shore BTB Chatelier Immobilier Inc. $8,100,000 $142.00 57,000

5250 J.-A Bombardier Street South Shore Dumont Group $7,950,000 $93.00 85,931 5523 de la Côte-Saint-Paul Road Midtown Bertucci Holdings Inc. $6,400,000 $182.00 35,210

Average Sale Price Average Net Rental Asking Rate 01 By Number of Transactions and Volume 02 GMA | Q4 2015 – Q4 2020 ($PSF) $7.50 $7.21 $300 40 $6.83 $7.00 35 $6.50 $250 $6.00 $5.65 $5.62 $5.74 30 $5.48 $5.50 $200 ofNo. Transactions 25 $5.00 Q4'15 Q4'16 Q4'17 Q4'18 Q4'19 Q4'20 $150 20 Average Sale Price by Clear Height 15 GMA | $PSF $100

Total (millions) Sales Total 03 10 $120 $120 $118 $50 $118 5 $116 $113 $114 $0 0 $112 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 $110 Total Sales ($) No. of Transactions <18' 18'-24' >24'

Colliers Canada | GMA Industrial Report | Q4 2020 collierscanada.com/research P.4 Colliers Research

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