February 21st, 2025
As we close out Q4 2024, the industrial real estate market in the Greater Toronto Area’s West markets — comprised of the submarkets within Peel and Halton Regions — continues to evolve.
The overall availability rate saw a slight increase from 5.2% to 5.5%, with strong leasing activity still present across these key regions. The weighted average asking net rent decreased slightly to $17.71 PSF, down from $18.10 PSF in Q3, as market conditions stabilize. On the sales side, the average asking sale price also saw a drop from $534.26 PSF to $448.46 PSF, largely influenced by the sale of industrial condos.
Despite these adjustments, the West markets remain highly active. With 4.5 million square feet still under construction, accounting for nearly half of all new development in the GTA, these regions are experiencing continued demand driven by strong economic fundamentals. Brampton, and Mississauga continue to see some of the highest rental rates in the region, further signaling the ongoing importance of these locations for industrial occupiers and investors.
On the positive economic front, interest rates have fallen once again, which is expected to spur both acquisitions and investment sales moving into 2025. This continued reduction in interest rates should help boost investor confidence and facilitate more deals in the West markets. We’ve also seen a noticeable pickup in leasing activity, as occupiers take advantage of more competitive rates and more available space. However, despite these positive developments, uncertainty surrounding tariffs, the weakening dollar, and the overall direction of the economy continue to create challenges that could affect market performance in the near future.
So without further ado, let’s examine how each of the Greater Toronto Area regions performed in Q4 2024, and where we expect the market to go moving forward.
- The availability rate increased from 5.2% to 5.5%, with 5.3% available for lease and 0.2% available for sale;
- We had 7,666,658 SF of new supply year-to-date and 4,548,182 SF still under construction;
- We had 1,363,422 SF of absorption;
- Brampton achieved the highest weighted asking net rental rates in Q4 2024 at $17.96 PSF, followed by Mississauga at $17.76 PSF and Milton/Halton Hills at $17.70 PSF;
- The weighted average asking net rent was $17.71 PSF, down from $18.10 the previous quarter, with additional rent of $3.89 PSF (a decrease from $4.04 PSF); and
- The weighted average asking sale price fell from $534.26 PSF to $448.46 PSF; with the values largely influenced by industrial condo sales.
Why are the GTA West Markets in such demand?
The West Industrial Markets are by far the largest industrial submarkets in the GTA, representing about 47% of GTA Industrial Inventory, or 392,751,187 SF. The GTA West Markets were active this quarter and with more than 4,548,182 SF under construction.
So, if you are an Investor, Landlord, or Owner-Occupier you may be wondering…
“How much is my property really worth?”
What rental rate can I expect? How much $/PSF would I be able to get if I sold my building?
These questions are being asked all the time.
The answer to this will depend on a range of factors, including:
- the age and size of the building,
- lot size,
- ceiling height,
- office component,
- parking,
- trucking access,
- truck parking if available, etc….
This week we are covering the Toronto-West Markets
(Mississauga, Brampton, Oakville, Milton, Caledon, Burlington & Halton Hills)
Statistical Summary – GTA West Markets – Q4 2024
Properties Sold between October 2024 – December 2024, from 20,000 SF plus
3210 Airway Drive, Misssissauga.
Properties Leased between October 2024 – December 2024, from 20,000 SF plus
550 Matheson Boulevard East, Mississauga.
14 Precidio Court, Brampton.
Properties Leased between October 2024 – December 2024 from 20,000 SF plus
20 Ironside Drive, Brampton.
2568 Bristol Circle, Oakville.
Properties Leased between October 2024 – December 2024, from 20,000 SF plus
8460 Mount Pleasant Way, Milton.
3100 Mainway, Burlington.
- Rental Rates: Rents continue to adjust and, in many cases, we continue to see rate reductions. We expect this to continue. Likewise, annual rental escalations have plateaued and have decreased. Leasing is picking up and businesses are making decisions, however, the threat of tariffs are a concern. Further, there is continued downward pressure on rents, specifically in Class B or C industrial buildings. Overall, we are in a more balanced market between Landlords and Tenants.
- Property Values: As rental rates plateau, and as we see rents decrease in certain properties, we are going to see a decrease in value of investment properties. The recent and continued interest rate cuts may stabilize this trend, however. For users, we expect to see values remain elevated as supply of properties for sale is extremely limited. Finally, and despite the downward trend of interest rates, previously elevated levels have decreased the value of development land.
- Development Opportunities: In the fourth quarter of 2024, we had approximately 4.5 million square feet under construction in the GTA-West markets. This represents about 46% of all new development across the GTA (9.79 million SF), with the bulk of activity taking place in Mississauga (2.05 MSF) and Brampton (1.21 MSF).
Conclusion:
So, how much is your property really worth?
What rental rate can you expect or how much per SF would you be able to get if you sell your building? How much can we compress CAP rates to create even greater value?
Well, the answers to these questions will depend on a variety of factors, many of which we can quickly uncover in an assessment of your situation. And with our rental rates and valuations at all-time highs, and vacancy rates low, finding the right property is a real challenge.
Having said that, a lot of transactions are being done off the market.. and to participate in that, you should connect with experienced brokers that have long-standing relationships with property owners.
For a confidential consultation or a complimentary opinion of value of your property please give us a call.
Until next week…
Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 30 years.
Goran Brelih is an Executive Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.
Over the past 30 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.
Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development
About Cushman & Wakefield ULC.
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries.
In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.
For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.
Connect with Me Here! – Goran Brelih’s Linkedin Profile: https://ca.linkedin.com/in/goranbrelih
Goran Brelih, SIOR
Executive Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
www.cushmanwakefield.com
Office: 416-756-5456
Mobile: 416-458-4264
Mail: goran.brelih@cushwake.com
Website: www.goranbrelih.com
