Whitby Industrial Market: An In-Depth Look
April 1st, 2022
“Nothing is more expensive than a missed opportunity.”
- H. Jackson Brown
The Greater Toronto industrial market is growing at a pace never before seen. What was initially pushed to new heights by untapped potential in the warehousing and logistics sector is now being driven by scarcity and fear.
As retailers captured new market segments in online sales, an entire ecosystem of suppliers, integrators, 3PL, and transportation firms blossomed to support the flow of goods from production line to doorstep.
This enormous chunk of demand was – for the most part – unaccounted for, and took the industrial community by surprise. Had it gradually rolled out over decades, it would have been easier for developers, investors, and businesses to adapt more slowly. However, as we have learned, technological growth is exponential, and change is accelerating.
Under normal circumstances, things would also have been easier. But again, looking to cliches and aphorisms, we know that things that can go wrong, do go wrong. The shift to e-commerce and its resulting effects on the industrial market coincided with a level of chaos and uncertainty that shook the economy to its core.
From labour and materials to zoning, permitting, and a scarcity of land itself, bringing new supply to market has become increasingly challenging. The net effect is that businesses must plan far in advance to secure ample space. And investors must be financially and operationally ready to pull the trigger at any moment’s notice should opportunity arise.
Just a few missed opportunities, compounded over the long run, can separate the most prominent and successful players from the rest. That’s why having that ‘edge’ when it comes to market insight and potential availabilities can be the most important strategic element for any investor looking to deploy capital and construct or acquire income-producing industrial assets.
Studying the overall market may arm you with a foundational knowledge, however, making real estate decisions lies in understanding the nuance and differences.
This more focused and tailored approach is the key to unlocking value, especially in a landscape where apparently nothing is available for sale, for lease, or for development. Yet, each week, we see major announcements made online as owners and occupiers capitalize on opportunities through creative solutions and ‘seeing past the numbers’.
That’s why we will begin a weekly analysis of various submarkets to give you a better sense of how each may fit in with your real estate strategy.
For this week’s newsletter, we’ll feature the Town of Whitby and examine the state of its industrial market, including trends, transactions, and developments.
Whitby Industrial Market Snapshot – Q4 2021
Source: Cushman & Wakefield Research.
Looking at the current inventory numbers, we have over 800M SF of industrial space across the GTA; yet Whitby’s share is just shy of 9M SF (about 1.1%). In 2021, however, Whitby had a modestly higher amount of absorption (2.93%) and no new supply – with the total being net negative.
The availability rate in Whitby sits at just 0.3% and should further tighten with the broader market, despite 754,391 SF of new space currently under construction. Furthermore, rental rates are at a considerable discount to other submarkets, yet these too will catch up as supply further diminishes and businesses look to the GTA East for opportunity.
Whitby Industrial Properties Available for Lease – 20,000 SF+
Whitby Industrial Properties Available for Sale – 20,000 SF+
3 Interesting Facts about Whitby’s Industrial Market
- Broccolini Constructing a 685,000 SF State-of-the-Art Facility
Broccolini is constructing a brand-new, 685,000 square-foot warehouse facility located at 5185 Garrard Road. Limited details have been released about the project, however, based on Broccolini’s other speculative development, we expect this property to be geared towards a retailer or 3PL with 40’+ clear heights, excellent shipping capabilities, and ample parking. Finally, although we are unaware of any deals on the books, it is likely this space will be pre-leased.
5185 Garrard Road, Whitby. Source: Broccolini.
- Panattoni Developing 2 Industrial Logistics Facilities Totalling 770,000 SF
Panattoni is developing 2 industrial facilities totalling 770,000 SF at 4680 Garrard Road in Whitby. Building A will offer 645,000 SF of space with 40’ clear heights, 105 truck-level and 8 drive-in doors, while Building B will be 125,000 SF in size with 36’ clear heights and 22 truck-level and 1 drive-in doors.
Similar to Broccolini’s site just down the road, we expect this project to attract one of the many retailers and 3PLs looking for high-quality space with excellent access to Highway 401 and the labour pool. Relative to other major facilities in the GTA West markets, these opportunities are likely to be available at a reasonable discount, and will more likely than not be leased ahead of completion.
4680 Garrard Street, Source: Panattoni.
- Panattoni – 5360 Thickson Road, Whitby – Proposed 1.3M SF Development
Finally, Panattoni is proposing the development of a 1.3-Million SF industrial facility at 5360 Thickson Road in Whitby. Details have yet to be released, although the GTA’s premier developers – of which Panattoni is widely recognized as being – typically execute these projects per a similar process and playbook.
As a result, we expect to see high clear heights (possibly multi-storey), excellent shipping capabilities, and parking for cars and trailers. If and when completed, this would be one of the largest industrial buildings ever constructed in Durham Region, surpassing Amazon’s 1.1M-SF Ajax facility.
If we keep at our current pace, it’s conceivable that we may get to a 0% availability across the GTA, aside from brief periods between Tenants, design-build projects, or speculative construction (which are themselves often pre-leased well in advance). For those businesses looking to purchase or lease existing space, things will only become more challenging and competitive.
These points underscores the tremendous value of land. While land is becoming increasingly expensive, municipalities such as Whitby are hungry to attract investment from developers and businesses, and offers both incentives and a relative discount to other submarkets. Land also offers a level of predictability in cost and assurances in occupancy, should you get your hands on some.
It is for these reasons that we believe Whitby’s industrial real estate market is poised for further growth in the coming years, especially as the major developments in the pipeline come on stream. Not only that, but its access to transportation routes and the labour pool further position it as an up-and-coming submarket, just as its neighbouring municipalities in Durham Region.
In the coming weeks, we will continue our examination of various submarkets with the aim of uncovering potential opportunities and strategies for industrial Owners and Occupiers. In the meantime, if you are an owner of industrial land or property with redevelopment potential, there are plenty of institutional and private buyers who would be willing to pay a premium to take it off your hands.
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 a Senior 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.
Goran is a Past President of the SIOR ‐ Society of Industrial and Office Realtors, Central Canadian Chapter.
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 firstname.lastname@example.org, 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.