Q4 2020 Insight, Toronto-West Markets
Establishing True Valuations Across Differing Markets
February 12th, 2021
Now that we have begun a new year, it feels like, in many ways, that we have passed not just a temporal marker but, also, a symbolic one.
While we work through some of the existing challenges in our day-to-day lives, there is cautious optimism surrounding the future.
In industrial real estate, in particular, we are seeing the re-invigoration of manufacturing industries while logistics and supply chain solutions merge into overall operations.
The past year has shown us all how important it is to have the ability to make, manage, and move goods efficiently and on-demand. The truth is, you need industrial space to achieve these objectives.
The trend of e-commerce continues to push industrial demand to new highs. So far, much of the activity has come from big players such as Amazon. This year, we expect everyone else to join in as well.
Both warehousing and logistics, as well as cold-storage users have been snapping up space and creating an even more competitive environment… not only through the purchasing of commercial space but also through the acquisitions of entire companies and their portfolios.
Everything points towards another industrial rally.
The GTA West Industrial Markets are by far the largest industrial markets in the GTA, representing about 45% of GTA Industrial Inventory, or about 363,000,000 SF. The GTA West Markets were very active this quarter, with more than 4,000,000 SF under construction and a flurry of lease and sale transactions completed.
Key Takeaways from Q4 2020
- The overall availability rate in the GTA-West Markets in Q4 2020 is 1.6%;
- Currently, there is about 4,000,000 SF under construction in the GTA-West Markets;
- The GTA West markets delivered 3.0 Million SF of new space to the market in Q4 2020;
- Absorption in Q4 2020 was 2.8 Milion SF;
- The City of Bolton/Caledon Leasing Market achieved the highest net rental rates in Q4 2020 at $11.81, followed by City of Brampton with $10.83 PSF.
- Availability rate across GTA remained at 1.7% in Q4 2020, while the weighted average net rental rates in GTA West markets reached $10.46 per SF up from $9.83 per SF; while the weighted average sale price in the West markets was $253.48 per SF up from $247.62 per SF.
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….
In order to get to the truth, we need to dig a bit deeper…
This week we are covering the Toronto-West Markets (Mississauga, Brampton, Oakville, Milton, Caledon, Burlington & Halton Hills)
Statistical Summary – GTA West Industrial Market – Q4 2020
So let’s take a closer look at how the Toronto West Markets performed during Q4 2020…
GTA West Markets (Mississauga)
Properties Sold between October 2020 – December 2020, from 20,000 SF plus
2585 Meadowpine Boulevard, Mississauga
GTA West Markets (Mississauga)
Properties Leased between October 2020 – December 2020, from 20,000 SF – 50,000 SF
On the leasing side, a total of 9 properties were leased between 20,000 – 50,000 SF. The net rental rates achieved were from $7.65 PSF – $10.95 PSF, with an average building size of 33, 506 SF and an average net rental rate of $9.40 PSF.
GTA West Markets (Mississauga)
Properties Leased between October 2020 – December 2020, from 50,000 SF plus
On the leasing side, a total of 8 properties were leased from 50,000 SF plus. The net rental rates achieved were from $7.70 PSF – $12.00 PSF, with an average building size of 106,712 SF and an average net rental rate of $9.74 PSF.
5855 Terry Fox Way , Mississauga
GTA West Markets (Brampton)
Properties Sold between October 2020 – December 2020, from 20,000 SF – 50,000 SF
A total of 4 properties were sold in Brampton. The prices achieved were in the range of $129 PSF – $217 PSF, with an average building size of 78,792 SF and an average price of $177.25 PSF.
GTA West Markets (Brampton)
Properties Leased between October 2020 – December 2020, from 20,000 SF – 50,000 SF
On the leasing side, a total of 7 properties were leased between 20,000 – 50,000 SF. The net rental rates achieved were from $7.00 PSF – $12.00 PSF, with an average building size of 36, 366 SF and an average net rental rate of $9.03 PSF.
GTA West Markets (Brampton)
Properties Leased between October 2020 – December 2020, from 50,000 SF – 100,000 SF
In Brampton, a total of 2 properties were leased in Q4 2020 between 50,000 – 100,000 SF. The net rental rates achieved were from $10.50, with an average building size of 57,551 SF and an average net rental rate of $10.50 PSF.
GTA West Markets (Brampton)
Properties Leased between October 2020 – December 2020, from 100,000 SF plus
In Brampton, a total of 5 properties were leased in Q4 2020 from 100,000 SF plus. The net rental rates achieved were from $8.50 – $9.25 PSF, with an average building size of 176,967 SF and an average net rental rate of $8.90 PSF.
GTA West Markets (Burlington)
Properties Sold between October 2020 – December 2020, from 20,000 SF plus
A total of 7 properties were sold in Burlington in Q4 2020. The prices achieved were between $124 PSF – $227 PSF, with an average building size of 83,131 SF and an average price of $159.43 PSF.
750 Appleby Line, Burlington
GTA West Markets (Milton)
Properties Sold between October 2020 – December 2020, from 20,000 SF – 50,000 SF
A total of 1 property was sold in Milton in Q4 2020. The price achieved was between $107 PSF, with a building size of 34,000 SF.
3153 – 3157 Steeles Avenue West, Milton
GTA West Markets (Milton)
Properties Leased between October 2020 – December 2020, from 20,000 SF plus
In Milton, a total of 4 properties were leased in Q4 2020 from 20,000 SF plus. The net rental rates achieved were from $7.75 – $11.00 PSF, with an average building size of 182,593 SF and an average net rental rate of $ PSF.
8400 Lawson Road, Milton
GTA West Markets (Oakville)
Properties Sold between October 2020 – December 2020, from 20,000 SF plus
No properties were sold in Oakville in Q4 2020 .
GTA West Markets (Oakville)
Properties Leased between October 2020 – December 2020, from 20,000 SF plus
In Oakville, a total of 4 properties were leased in Q4 2020 from 20,000 SF plus. The net rental rates achieved were from $9.20 SF – $12.00 PSF, with an average building size of 48,116 SF and an average net rental rate of $10.41 PSF.
2130 South Service Road West, Oakville
What Lies Ahead:
- Rental Rates: We see many transactions achieving in excess of $10 PSF net. We are also hearing that some of the current developments are increasing their price guidance to above $11 PSF net. That trend will continue.
- Property Values: The weighted average asking sale price for Brampton at $353 PSF and Mississauga at $305… these submarkets are leading the GTA-West markets. And with an availability rate of 0.1% or 0.2%, prices will appreciate further.
- Development Opportunities: In the fourth quarter of 2020, we had over 4 Million square feet under construction in the GTA-West markets. This represents almost half of all new development across the GTA, making this the most active region by far. This comes as no surprise as the West markets have the most land available for development.
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 25 years.
Goran Brelih is a Senior Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.
Over the past 27 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.
Goran is currently serving as Immediate Past President of the SIOR ‐ Society of Industrial and Office Realtors, Central Canadian Chapter.
Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development
About Cushman & Wakefield ULC.
Cushman & Wakefield is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries.
In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, advisory, and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
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
Senior Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
www.cushmanwakefield.com
Immediate Past President, SIOR – Central Canada Chapter
www.siorccc.org
Office: 416-756-5456
Mobile: 416-458-4264
Mail: goran.brelih@cushwake.com
Website: www.goranbrelih.com
