TORONTO — Avison Young has reported that industrial rental rates for real estate declined by 0.5 per cent in the Greater Toronto Area in Q2, marking the third straight quarter of decline.
The real estate adviser also found sublease space doubled over the last five quarters, now accounting for 14 per cent across the GTA.
The findings came from Avison Young’s Q2 industrial real estate report for the GTA.
The report found industrial availability rose for the fourth consecutive quarter to 4.0 per cent – the highest rate since Q3 2015. Rates reached historic lows in Q3 2022, at 0.9 per cent availability.
Quarter-over-quarter, availability increased in all markets: GTA West (up 50 basis points to 5.1 per cent), GTA East (30 basis points to 3.7 per cent), GTA North (50 basis points to 3.2 per cent) and GTA Central (40 bps to 2.8 per cent).
Renewal activity dominated the top lease transactions signed during the second quarter of 2024, the report stated, led by VF Imagewear’s 459,100-square-foot lease at 15 Hereford St. in Brampton.
Other major deals included Armacell’s renewals totalling 389,700 square feet at 111 and 153 Van Kirk Dr. in Brampton and Highlight Motor Group’s sublease of 247,800 square feet at 7171 Highway 50 in Vaughan.
Demand in the GTA continues to centre around logistics and distribution, followed by manufacturing and consumer goods and services, the report indicated. The average asking net rental rate in the GTA softened $0.09 to $18.14 per square foot during the second quarter of 2024.
Year-over-year growth was on par; however, in the past three years rents grew 66 per cent, and 116 per cent in the past five years. The highest average net rents were found in GTA North at $18.61 per square foot.
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