Montoni and the Fonds immobilier de solidarité FTQ are partnering to develop an industrial park and a small residential project on a 89-acre site in Laval that was once home to a drive-in movie theatre.
Construction of the first building could start as early as this year on the site, which is located on the west side of the Laurentian Autoroute (Highway 15), between Chomedey and Dagenais West Boulevards.
“Current zoning allows for the construction of buildings for light industrial, warehousing, distribution and wholesale businesses, as well as residential development on a portion of the site,” according to a statement from the Fonds and Montoni.
The news release notes the project comes amid a growing scarcity of industrial land and a shortfall of millions of square feet of commercial space in the Montreal area.
“Companies are finding it increasingly difficult to find industrial space to grow their businesses, a trend that is expected to continue.”
Montoni and the Fonds said in the news release that they will use the best sustainable development principles, including the protection of natural wetlands and LEED certification.
Former theatre site vacant since 2004
The former Cineplex Odeon drive-in opened in 1973 with two screens and two more were added in 1978. It closed in 2004 and was acquired by Montoni in 2005.
Since then, it has been touted for various projects, including an Asian trade centre and a 4,000- to 6,000-seat baseball stadium that would house a professional team.
In a 2021 study to Laval, Montoni lobbied for the right to build six-storey buildings on the entire site and eight storeys for buildings bordering the highway.
According to an Industrial Insight report from JLL Canada for Q1, Laval has a total vacancy rate of 2.3 per cent. Average asking net rent in Laval was $17.69 per square foot.
For the Montreal area, asking rates continued to rise, with a quarter-over-quarter increase of 2.4 per cent to $16.43 per square foot.
Industrial rent growth slowing down?
“The modest (quarter-over-quarter) increase suggests that the rental rate growth seen during the pandemic may be losing momentum,” the report notes.
“Montreal’s industrial market remains one of the most coveted asset classes in Canada from an investment standpoint,” notes another report from February, JLL Canada’s Montreal Real Estate Outlook.
The Montreal industrial investment sales market reached $3.3 billion in 2022, a 53 per cent increase over 2021 volumes, which was also a record.
However, sale volumes slowed sharply in the second half of 2022 as interest rates climbed.
JLL said Montreal industrial rents rose an “astonishing” 112 per cent from 2020 to 2022, the highest two-year increase in Canada and the second-highest in North America, behind only California’s Inland Empire market.
The Fonds immobilier de solidarité FTQ, the real estate arm of the FTQ labour fund, backs residential, office, commercial, institutional and industrial projects of all sizes across Québec.
As of Dec. 31, 2022, the Fonds had 43 projects worth $4.8 billion under development or construction. It also had 65 portfolio properties under management and 3.7 million square feet of land for development.
Montoni has a portfolio of close to 500 projects representing more than 20 million square feet of industrial, commercial, institutional and residential construction, and another 22 million square feet under development.
According to JLL, Montoni made the largest industrial acquisition in the Montreal area in Q1, a $108-million purchase from Parkgreen LP of a 474,000-square-foot warehouse at 3400 Raymond-Lasnier St. in the Montreal borough of Saint-Laurent.