Warehousing and fulfilment centres are the “number one best bet” when it comes to Canadian real estate investments this year, says a new report from PwC.

According to a survey of more than 1,600 individuals — including investment managers, private equity investors and real estate developers — the pandemic has accelerated the shift to e-commerce, resulting in a greater need for warehouse space and fulfilment centres.

“Logistics, warehousing, and fulfilment are the clear winners this year,” the PwC report said. “This segment of industrial real estate has remained resilient throughout the pandemic — in large part because of a surge in demand from e-commerce, food delivery services, home improvement retailers, and, to a lesser degree, medical supply companies.”

Respondents to PwC’s survey suggested that malls with excess land could be “re-imagined” as residential or mixed-use properties, with space for warehousing, distribution or fulfilment centres.

PwC found that the future of office space is less clear. Citing a report from JLL Research, PwC noted that there is still a need for office space in cities like Toronto, but the market “remains in triage mode” while the effects of Covid-19 continue to play out.

“Although there is pent-up demand in the market, everyone is waiting for stability to return before transacting,” the report said.

Some respondents to PwC’s survey said employees’ desire for social connections at work could result in an eventual return to the office, while others suggested Covid-19 could lead to more suburban office development as employees may end up splitting their working hours between home and the office.

In the residential real estate market, the pandemic could make the suburbs a more attractive location for homebuyers, PwC noted.

PwC observed there has been “a shift in discussions about where people will want to live, particularly around whether suburbanization will pick up in a world of remote working, affordability concerns, and pandemic-related worries about dense environments and taking mass transit.”

But those who choose to live in the suburbs may still want city-like amenities, the report said: “Many people will still seek urban environments that combine live/work/play elements, even if they are not living in major city cores.”

For further details, read PwC’s full report.