There continues to be a limited amount of stock for lease in the Greater Toronto Area (GTA) industrial market, creating higher rents or causing tenants to seek their own space.
The availability rate sits at 3.4 per cent, and there are now 19 properties with more than 250,000 square feet available across the GTA, according to Avision Young’s Q3 GTA Industrial Market Report
Availability in each of the GTA’s four markets decreased the past quarter, with GTA Central at the lowest. However, GTA West maintains the highest availability at 4.6 per cent, with 7.7 per cent under construction. Much of the new and recently delivered supply is among the largest and tallest product in the GTA, generating interest among e-commerce, retail and logistics tenants looking for distribution centres near growing suburban areas.
As it stands, the average asking net rent is $6.60 per square foot. Only GTA East, where asking rents dropped this quarter to $5.51 per square foot, still offers an average gross rent less than $10 per square foot.
As for construction, there was 5.6 million square feet of industrial space in the pipeline at the end of Q3. Activity was completed at six development sites in the GTA, adding 1.8 million square feet of new space to the market, with 17.8 per cent pre-leased at quarter-end. While Vaughan has attracted most of the recent big-box design-build activity, such as Costco and FedEx, First Gulf announced in September a deal to build a 285,000-square-foot distribution centre for BMW Canada in Mississauga at Ninth Line and Argentia Road, close to Highways 401 and 407.