Commercial Real Estate Market of the Month: Ottawa, ON

Ottawa Industrial Market: Strong Demand, Limited Supply, and Continued Growth in Eastern Ontario

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Ottawa Industrial Market Overview

The Ottawa industrial market continues to strengthen as a major economic and employment hub in Eastern Ontario. Supported by steady population growth, expanding suburban communities, and ongoing infrastructure investment, Ottawa remains an attractive market for industrial, logistics, and commercial users.

The city benefits from strategic connectivity through Highway 417, Highway 416, major arterial routes, national rail infrastructure, and Ottawa International Airport, supporting efficient regional distribution and business operations.

Key Market Drivers:

• Growing demand from logistics and distribution users
• Expanding suburban employment areas
• Strong population growth and commercial investment
• Diverse tenant base including technology, manufacturing, construction, and service industries

As businesses continue to prioritize accessibility and operational efficiency, demand for well-located industrial and commercial space remains strong across Ottawa.

Why Ottawa Is a Key Industrial Hub in Eastern Ontario

Industrial demand in Ottawa remains stable to growing, with continued pressure on available industrial and flex-commercial inventory. Modern industrial space remains limited, particularly in established employment areas and newer suburban business parks.

Ottawa’s industrial market is supported by a diverse range of occupiers, including:

• Logistics operators
• Distributors
• Construction-related businesses
• Automotive service users
• Technology-oriented companies
• Service-commercial businesses

Much of Ottawa’s existing industrial inventory consists of older buildings and smaller-bay product, while newer developments remain limited compared to demand. This creates challenges for mid-sized and larger users seeking modern facilities with efficient loading, warehousing, and yard capabilities.

Industrial Development and Major Growth Projects in Ottawa

Development activity remains active across Ottawa, with large-scale projects supporting the city’s continued expansion. One of the most significant developments is Amazon’s new fulfilment centre in Barrhaven, expected to total approximately 3.1 million square feet and scheduled for completion in 2027.

This project highlights continued demand for large-format logistics facilities and reinforces Barrhaven’s growing role as an important industrial and distribution hub in Ottawa’s south end.

Beyond industrial development, suburban communities such as Kanata, Stittsville, Barrhaven, and Orléans continue to experience retail, mixed-use, and residential growth. These areas are expected to support future commercial demand by improving connectivity, expanding labour pools, and attracting additional business investment.

Industrial Growth Corridors in Ottawa

Ottawa’s continued suburban expansion and infrastructure investment are reinforcing demand across key industrial and commercial corridors.

Key Areas Include:

• Highway 417 corridor
• Highway 416 corridor
• Hunt Club Road
• Innes Road
• Terry Fox Drive
• Established suburban employment areas

These locations remain attractive due to strong transportation access, visibility, proximity to customers, and access to growing residential communities.

As suburban development continues, competition for developable industrial land may increase, putting additional pressure on land values and occupancy costs.

Market Performance: Rental Rates, Supply, and Demand

The Ottawa industrial real estate market continues to experience strong demand, limited availability, and gradual rental rate growth for modern, well-located properties.

Market Highlights:

• Industrial Rental Rates: Approximately $15.00–$17.00 PSF
• Additional Rent: Approximately $4.00–$6.00 PSF
• Vacancy Rate: 2.00%-3.00%
• Market Conditions: Limited vacancy and constrained new inventory

Strong pre-leasing activity, rising construction costs, and limited modern supply continue to support landlord leverage, particularly for high-quality industrial and commercial space.-located industrial space is expected to increase.

Key Takeaways for Industrial Real Estate Tenants

Securing quality industrial space in Ottawa remains competitive, particularly for tenants seeking modern facilities, strong transportation access, and flexible layouts.

Tenant Considerations:

• Begin planning early before lease expiry or expansion needs arise
• Monitor upcoming availability in key industrial corridors
• Consider pre-leasing opportunities for new developments
• Evaluate alternative locations as competition increases
• Factor in future business growth when assessing space requirements

With limited supply and continued demand, proactive market engagement is becoming increasingly important for occupiers seeking long-term flexibility.

Ottawa Industrial Market Outlook

The Ottawa industrial market continues to evolve through sustained demand, limited supply, and ongoing urban and suburban growth. Infrastructure investment, major development projects, and population growth are reinforcing the city’s position as a key commercial and employment centre in Eastern Ontario.

Strong market fundamentals, rising rental rates, and constrained availability are expected to continue shaping Ottawa’s industrial landscape. Tenants, developers, and investors should continue monitoring the market as competition for well-located industrial space increases.

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Looking to lease industrial real estate in Ottawa, ON? Our tenant-focused advisors are here to help you navigate the market with tailored insights and on-the-ground expertise.

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Our Market Intelligence team is committed to helping you stay ahead of the curve by identifying key trends that maximize both space and operational efficiency. With customized insights grounded in real-time data and extensive industry expertise, we ensure you’re equipped to make informed decisions in this competitive market.