TORONTO — According to the Avison Young Greater Toronto Office Market Report (Q1 2022), the Greater Toronto Area (GTA) industrial market remains a hotbed of activity as strong momentum from 2021 carried forward into the first quarter of 2022, led by high demand and limited supply.
Findings from the report, which was released recently, include:
- New building completions during the quarter did not influence the availability rate, as 91 per cent of the new space was leased prior to completion.
- Current market conditions favour landlords and rental rates continue to rise rapidly.
- With 66 million square feet (msf) in the development pipeline for the next three years, including under construction and pre-construction, rising availability will likely provide more space options to a broader spectrum of industrial tenants.
- GTA-wide, the availability rate stabilized at 0.9 per cent on the heels of a steady decline from a high of 7.1 per cent in first-quarter 2010.
- Rental rates have grown by 16 per cent quarter-over-quarter and 94 per cent in the past three years. Low availability rates have offset the high land values and construction costs evident in today’s market.
- Due to the supply-demand imbalance, the consensus is for continued growth across the GTA industrial market for the foreseeable future.
- 11 buildings totalling 1.8 msf were delivered during the quarter and by quarter-end, 16 msf was under construction across 76 buildings, of which 48 per cent had already been leased.
- Buildings under construction equate to 1.8 per cent of the GTA’s existing industrial stock, split between design-build (33 per cent) and speculative (67 per cent) developments. Pre-construction developments total 51 msf in 145 buildings across the GTA.
- The GTA west market leads the way with 63 per cent of pre-construction opportunities, followed by 20 per cent in the north, nine per cent in central and the east market with eight per cent.