Demand for industrial space increased in several submarkets of the Greater Montreal Area (GMA) during the third quarter of 2013, according to a report from Jones Lang LaSalle.

The Local Industrial Report, Greater Montreal Edition, Q3 2013, says that the Lachine, Midtown North and Laval submarkets showed the strongest leasing performances during the quarter. Overall absorption in the GMA ended with a loss of 101,487 square feet. The report predicts that there will be positive absorption after this quarter.

Supply continues to outpace demand in the market, with the availability rate sitting at 7.27 per cent in the third quarter. In this period, 193 industrial buildings became available in the GMA, seven per cent of which were available for sublease, while 147 buildings were removed from the market.

Many industrial properties in the Saint-Laurent and Midtown submarkets are being converted into office or retail space. Examples of this transformation include revamping the abandoned industrial buildings at 3500 Saint-Jacques St. into a 92,518-square-foot office building.

With construction costs for industrial buildings seeing a 0.9 per cent rise in 2012, many companies are reconsidering whether they should own industrial space rather than leasing it. Businesses’ fixed costs also changed with increased land prices and municipal taxes. This has driven operating costs and taxes to record levels.