STATE OF THE GTA INDUSTRIAL MARKET, Q2 2018 GTA Q2 2018 KEY STATS
Net Rental Rates
9.4 M SF
5.2 M SF
4.5% – 5.0%
IT IS VERY HARD TO FIND THE“RIGHT SPACE” IN THE GREATER TORONTO AREA
The Greater Toronto Area Industrial Real Estate Market availability rate continues to be among the lowest in North America. This low vacancy rate triggered a considerable increase in net rental rates on existing product, as well as net rental rates on new speculative and design build projects. Demand for Warehousing and Distribution is great, and we have seen most of the activity in this sector. The Forzani Group(Canadian Tire) preleased 1.2 million sf in Brampton, DHL leased 550,000 sf in the old SEARS building at 9501 Hwy 50 in Vaughan, and the TTC preleased 550,000 sf in North York, as part of the redevelopment of the old Home Depot distribution centre. Sobey’s, WalMart and Olympia Tile also either secured a brand new lease or extended their current leases.
Food companies are very active, with The Kraft Heinz Co, Gay Lea Foods and Gordon Food Service announcing expansions and/or secured new locations. Users looking to acquire properties were paying, in some cases, in excess of $200 per sf or $1,500,000 per acre for serviced land.
The GTA Industrial Investment Market is experiencing very low supply and great demand from private and institutional buyers. CAP rates are between 4.5% – 5.0%.