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  • Adam Piett

"Navigating the Booming Industrial Real Estate Market in Ontario Despite Rising Construction Costs"

Updated: Feb 2

In recent years, the construction costs for industrial real estate in Ontario, Canada have been rising. The demand for industrial space is increasing rapidly, with e-commerce and the expansion of the manufacturing sector driving the growth. However, construction costs are a major obstacle in meeting this demand, especially in the current economic climate.

One of the main reasons for the increasing cost of industrial real estate construction is the rising cost of materials. For example, the cost of steel has been steadily increasing due to tariffs and trade tensions, while lumber prices have also seen an upward trend because of supply chain disruptions and increased demand. As a result, developers are finding it increasingly difficult to manage the cost of materials and remain competitive in the market.

Another factor contributing to the increase in construction costs is the shortage of skilled labor. As demand for industrial space grows, so does the need for skilled workers, which can result in increased competition and rising wages. This situation makes it difficult for developers to find the labor they need to complete projects efficiently and on budget.

Regulatory costs are also a significant contributor to the overall cost of construction. Building permits, environmental assessments, and other regulatory expenses vary depending on the project's location and complexity. In some cases, these costs can be a significant expense and add significant time to the project's completion.

Looking forward, construction costs for industrial real estate in Ontario are expected to continue to increase in the coming years. The rising demand for industrial space, combined with the shortage of skilled labor and increasing material costs, will only exacerbate the problem. Additionally, regulatory costs will likely add more complexity and expense to the development process.

To stay competitive in this challenging environment, developers need to find ways to reduce construction costs while meeting the market's growing demand for industrial space. This may involve exploring new materials or construction techniques, improving project management, and finding ways to attract and retain skilled labor.

In conclusion, the construction costs for industrial real estate in Ontario are increasing due to the rising cost of materials, the shortage of skilled labor, and regulatory expenses. While the market's demand for industrial space remains high, developers need to find ways to manage these increasing costs to remain competitive and sustainable in the long term.


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