- What Newmark said Canada’s industrial market has the necessary conditions for growth
- Why Existing links with North American neighbours can boost trade and open new markets
- What next The upcoming election will be crucial for shaping policy to increase industrial growth
Canada’s industrial property sector is well positioned for future growth alongside the entire North American market, even as new trade tariffs threaten demand, Newmark said in a report set for release today.
While the tariffs have resulted in unforeseen headwinds for trade cooperation, Canada’s existing interconnectedness with its neighbour could eventually result in even stronger ties, Newmark said in the report, providing an outlook for the North American industrial market.
“This is a really good opportunity for the Canadian industrial market to continue to grow in cooperation and collaboration with our U.S. and Mexican trading partners,” Andrew Petrozzi, Newmark’s head of Canadian research, told Green Street News.
“[The industrial market] was not built overnight but is an important part of the North American economy and one which we foresee continuing to grow despite some short-term recalibrations.”
Petrozzi pointed to recent moves by the Canadian Pacific Kansas City rail company to begin transporting shipments of Canadian steel and other goods to Mexico via its lines. An expanded infrastructure network and other improvements could help bypass the U.S. market, he said.
Tensions over trade as a result of the new levies imposed by the U.S. on its closest trading partner have resulted in what Newmark’s report calls a “miasma of uncertainty” for cross-border supply chains, creating major issues for important sectors such as the automotive industry, which depends on free movement of goods.
But the dispute is also an opportunity to expand Canada’s domestic manufacturing capacity with the addition of infrastructure, as well as to establish trading agreements with international partners.
“Opening up economic opportunity through pipelines traveling east and west and things of that nature will certainly benefit the industrial market and [Canadian] economy as a whole,” Brian Prevoe, a senior managing director for Newmark, told Green Street News.
With market participants largely hesitant to take part in industrial property transactions amid an economic slowdown and a wide gap between what investors are willing to pay versus what sellers are asking for, Prevoe said it will be important for the next federal government to chart out a path for domestic expansion and infrastructure upgrades.
“I think government will inform a lot of policy moving forward, and obviously the pending election will be a huge determinant of how Canada wants to move forward,” he said.
The report is intended to provide a guiding light for future industrial expansion of the North American market and address challenges and opportunities that predated concerns over tariffs, Petrozzi said.
“There are certain fundamentals that exist within the North American industrial economy that will remain even as trade talks come and go,” he said.
