The Canadian industrial real estate market remains relatively unscathed in the face of economic headwinds, says a new Altus report.

Despite facing rising interest rates and inflation, investors continue to favour industrial properties over other asset classes because of the sector’s minimal risk and stable returns., said the company.

“While supply has been unable to keep up with demand, rising construction costs and interest rates have not deterred the construction of new supply,” said the Toronto-based real estate analytics firm.

In the second quarter of 2023, a total of 192 projects spanning 39.2 million square feet were under development across the country. Toronto ranked first with 74, well ahead of Calgary (25) and other parts of Southwestern Ontario (23).

In a recent blog post, Remax said new supply is concentrated mainly in Toronto, Calgary, Vancouver, Montreal and Edmonton.

Nationally, 39 industrial buildings, 9.49 msf in total, were completed in the second quarter, said Altus. Their availability rate was 32.1%.

Canada’s overall industrial availability rate rose to 3.3%.