Greater Montreal Area Industrial Market Report

Q3 2020

Net Absorption (SF) MARKET OUTLOOK

This Quarter Previous Quarter Throughout the summer months, the City There has been a decrease in sale price of Montreal eased restrictions and began per square foot from $122 in Q2 2020 to 640k SF 140k SF lifting various lockdowns that were in $113 this quarter. The number of place since the middle of March. Allowing transactions also decreased, driven 12-Month Absorption businesses and offices to reopen. mainly from the sale of second-tier 1.5M SF assets and is not reflective of the The city’s historically low availability rates decline in market activity. and lack of new inventory coming to the Availability market has increased demand for Notables transactions in Q3 2020 includes industrial space, as logistics and PIRET’s acquisition of 12 properties in This Quarter Year-over-Year distribution companies look to service Montreal’s West Island and Saint-Laurent % their clients as efficiently as possible. for $81 million. 2.1 120 bps Custom Delivery Solutions, a Canadian company based in Calgary has recently The North Shore continues to see strong Asking Net Rent expanded in the Quebec market, leasing growth as the only submarket adding new This Quarter Year-over-Year approximately 71,000 SF in Lachine. With supply this quarter. Montee Massion in $ % limited space and new supply on the Laval offers roughly 63,000 SF of space 7.13 PSF 10.3 market, rental prices continue to increase and 922-926 rue Jacques-Paschini of reaching $7.13 PSF in Q3 2020, up from 57,000 SF in Bois-des-Filion. $7.03 PSF in Q2 2020. Development/Sales The Montreal industrial market has held its The market has proved to be resilient own since the start of COVID-19. There is Under Construction New Supply throughout the COVID-19. Significant still growing uncertainty around the arrival 2.1M SF 120k SF leasing transactions in the West Island and of the second wave in Quebec which will South Shore paved the way this quarter likely determine the course for the Sale Price (avg.) with Bulletproof Logistics taking 301,250 remainder of the year. SF in the West Island and Amazon taking $113 PSF 208,475 SF in the South Shore.

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 | Q3 2019 – Q3 2020 Q3 2020 Q2 2020 -5% % 5% 10% 15% 20%

$9 West Island $8 $7 Vaudreuil-Salaberry $6 Lachine $5 $4 St-Laurent $3 Midtown $2 $1 North Shore $0 East Island South Shore

*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 | Q3 2019 – Q3 2020

1,800,000 2.0% 4.4% 2.7% 2.1% 1,600,000 1,400,000 1,200,000 West Island Vaudreuil-Salaberry Lachine St-Laurent 1,000,000 3.0 % Q3’19 25.6 % Q3’19 6.2 % Q3’19 3.6 % Q3’19 800,000 600,000 400,000 200,000 2.4% 0.8% 3.8% 1.3% - North Shore South Shore Vaudreuil-Salaberry Midtown North Shore East End South Shore SF 35,000 1,687,531 390,000 4.6.%Q3’19 2.1 % Q3’19 2.6 % Q3’19 2.0 % Q3’19

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% AvailabilityVacancy / Rate 4.0% 1,000 2.0% 500 0.0% 0 -2.0% Net Absorption (thousands SF) (thousands Net Absorption -500 -4.0%

-1,000 -6.0% Q3'16 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

Colliers Canada | GMA Industrial Report | Q3 2020 collierscanada.com/research P.2 Greater Montreal Area Market Statistics Avg. Asking 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 143,709 3.3% 3.3% 0 -128,775 210,709 4.8% 4.8% $6.50 Ste-Anne-de-Bellevue 0 0.0% 0.0% 0 0 0 0.0% 0.0% - DDO 8,110 0.4% 0.4% 0 0 8,110 0.4% 0.4% $7.75 Dorval 123,862 0.8% 1.5% 19,074 67,428 305,362 2.0% 2.1% $8.81 Kirkland 8,000 0.3% 0.4% 1,000 2,908 26,567 1.1% 1.1% $5.25 Pointe-Claire 196,516 1.1% 1.3% 13,500 -26,447 312,735 1.8% 1.7% $7.18 Total 480,197 1.1% 1.4% 33,574 -84,866 863,483 2.0% 2.0% $7.37

Vaudreuil-Salaberry Total 95,867 2.4% 3.2% 28,504 61,560 175,011 4.4% 4.5% $6.85

Lachine Total 306,526 1.5% 3.1% 42,185 76,734 563,921 2.7% 3.4% $5.66

St-Laurent Total 735,231 1.3% 1.8% 171,018 284,132 1,221,708 2.1% 3.4% $6.74

Midtown LaSalle 477,676 4.7% 5.2% 183,481 -38,528 676,941 6.7% 5.8% $9.52 Montreal 1,025,516 1.4% 1.6 % -74,114 -116,152 1,310,211 1.9% 2.3% $7.37 TMR 192,114 2.0% 2.1% 11,404 160,422 197,830 2.1% 2.4% $6.00 Total 1,695,306 1.9% 2.1% 120,771 5,744 2,184,982 2.4% 2.7% $7.85

North Shore Laval 288,481 0.8% 0.5% -56,681 247,171 355,502 1.0% 0.8% $8.27 North Shore 98,799 0.4% 0.2% 3,518 102,961 132,865 0.5% 0.7% $7.82 Total 387,280 0.6% 0.4% -53,163 350,132 488,367 0.8% 0.8% $8.14 Featured Transactions | Q2 2019 East End Anjou 169,247 1.0% 1.0% -3,879 286,056 477,141 2.8% 2.5% $5.43 Montreal-Est 704,895 5.1% 4.5% -132,359 -46,406 879,254 6.4% 7.6% $6.18 St-Leonard 186,146 1.7% 1.8% 11,139 115,268 232,809 2.1% 2.2% $6.61 Total 1,060,288 2.6% 2.4% -125,099 354,918 1,589,204 3.8% 4.1% $6.13

South Shore

St-Hubert 55,825 0.9% 5.0% 248,275 332,335 59,275 1.0% 5.1% $8.50 Longueuil 95,820 0.9% 1.0% 63,168 59,001 120,094 1.1% 1.7% $6.92 Boucherville*** 93,774 0.6% 1.4% 123,663 48,706 270,666 1.7% 3.7% $8.00 Brossard 0 0.0% 0.04% 1,387 11,200 29,730 0.9% 0.9% $10.12 Total 245,419 0.7% 1.7% 436,493 451,242 479,765 1.3% 3.1% $7.69

GMA Total 4,958,181 1.4% 1.7% 640,031 1,719,632 7,478,936 2.1% 2.6% $7.13

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

Colliers Canada | GMA Industrial Report | Q3 2020 collierscanada.com/research P.3 Transaction Highlights

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

1600 Route Transcanadienne West Island Bulletproof Logistics New Lease 301,520

5799 Route de L’Aeroport South Shore Amazon New Lease 208,475 1325 Hymus Boulevard West Island Metro Canada Logistics New Lease 80,000 nd 1415 32 Avenue Lachine Custom Delivery Solutions inc. New Lease 71,503 877-A Jean Paul Vincent South Shore 51,880 Boulevard Nuera Transport inc. New Lease 909 Upton Street Midtown Restock Canada New Lease 51,000

Notable Sale Transactions Address Submarket Purchaser Price Price/SF Size (SF) 1616 Highway 440 West North Shore 9416-8051 Quebec Inc. $20,540,000 $69.00 296,750 6600 Saint-Urbain Street Midtown 6600 Saint-Urbain Associates Limite $18,000,000 $114.00 157,500 10655 Henri-Bourassa West St-Laurent Mondev $12,300,000 $112.00 110,000 Boulevard 9175-9225 Langelier Boulevard East Island Groupe Quint $11,600,000 $80.00 145,000

1750 Berlier Street North Shore Dream Industrial $8,600,000 $112.00 76,795 2345 Lapierre Boulevard Midtown JD Property Holdings $6,100,000 $88.00 69,413

Average Sale Price Average Net Rental Asking Rate 01 By Number of Transactions and Volume 02 GMA | Q3 2015 – Q3 2020 ($PSF) $7.50 $7.13 $300 40 $7.00 $6.46 35 $6.50 $250 $6.00 $5.71 30 $5.40 $5.47 $5.46 $5.50 $200 No.Transactions of 25 $5.00 Q3'15 Q3'16 Q3'17 Q3'18 Q3'19 Q3'20 $150 20 Average Sale Price by Clear Height 15 GMA | $PSF $100

Total Sales (millions) Sales Total 03 10 $150 $131 $50 $100 $107 5 $100

$0 0 $50 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 $0 Total Sales ($) No. of Transactions <18' 18'-24' >24'

Colliers Canada | GMA Industrial Report | Q3 2020 collierscanada.com/research P.4 Colliers Research

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For more information on the GMA Industrial Market, please contact:

Jean-Marc Dubé Leo Lee Senior Vice President, Regional Director, Group Practice Lead Research Eastern Canada +1 514 764 2829 +1 416 620 2839 [email protected] [email protected]

Report Author: To see the latest news from Colliers Alec Johnson International in Canada, Research Analyst follow @collierscanada on Twitter and +1 514 764 2841 Colliers International on LinkedIn. [email protected]

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we Colliers International | Québec cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the 1800 McGill College Avenue, Suite 400 material contained in this report. Montréal, QC H3A 3J6 +1 514 866 1900

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