There is an increased demand for traditional office space as industrial companies look to consolidate office operations in the Greater Toronto Area.

Such a trend is noted in CBRE’s Decoupling Industrial Facilities Report, which examines how manufacturers have been decoupling production facilities from office space since 2010.

Single building office demand is quite evident in the Markham North/Richmond Hill and Meadowvale submarkets because these areas offer large, modern spaces with highway access and abundant parking.

CBRE projects that landlords of an industrial building could try to separately lease office and industrial components; however, due to limited parking, locational and structural issues loom.

On the other hand, landlords could remove or reduce office space and retrofit their properties to pure industrial.

Yet, another noteworthy trend in the report is the rise of first-time outsourcers. CBRE suggests the impact of the market could be insignificant as third party logistic providers are allowed to operate warehouse space they had previously leased from companies like Werner Ladder and Hilti Canada.

Increasing foreign competition and structural adjustments have reduced Canada’s manufacturing sector. CBRE says while a weaker Canadian dollar may slow the rate at which companies choose to decouple their office and industrial space, cost reduction will encourage this trend for many in the business.