With the rapid development of e-commerce, Canada is running out of storage space!

Canada is in danger of running out of warehouse space by the end of the year due to the pandemic-driven e-commerce boom.

While there are 26.1 million square feet ( 2.4 million square meters ) of logistics real estate under construction, much of it has already been leased , according to a report released Tuesday by commercial real estate brokerage CBRE Ltd. With vacancy rates at historic lows for existing warehouses, companies may soon be running out of places to store their goods .

“To keep up with the shift in behavior toward e-commerce, we need a lot of industrial space, ” said Kyle Hanna , executive vice president of CBRE’s industrial and logistics practice . “By the second half of this year, we will have no more space. ”

Canada has lagged behind other developed countries in e-commerce adoption, but online sales have recently grown faster than in other Western countries, with JPMorgan Chase & Co. researchers saying in a report that by April 2020, the proportion of consumers who bought at least 40% of their purchases online had more than doubled from before the pandemic.

As the country now battles a renewed surge in COVID-19 cases and restrictions, it looks like the conditions that have made e-commerce a core part of daily life in Canada will continue for at least a while.

The trend has companies snapping up industrial real estate at a record pace. In the first three months of this year, about 10.4 million square feet of warehouse space were leased across Canada , according to a report from CBRE. The brokerage said vacancy rates in the largest cities, including Toronto, Vancouver and Montreal, have risen to the lowest levels in all of North America.

With new development in those cities too slow to fill the gap, landlords may have to consider converting retail and office buildings that have been largely unused during the pandemic into logistics hubs, Hanna said.

Amazon Canada Fulfillment Services last month spent C$40 million ( $32 million ) to buy 40 acres ( 16 hectares ) of land in the Toronto suburb of Pickering , which was once the site of a local flea market, according to records from data provider Altus Group.

The rapid development of e-commerce has led to a sharp increase in industrial storage area. Therefore, how to better utilize storage space is an issue worthy of attention in the development of e-commerce.

Canada

E-commerce

Warehouse space