TORONTO — The Greater Toronto Area (GTA) industrial market has reached its highest availability rate in three years, since Q2 2020, reports global real estate adviser Avison Young.
A recently released report found a Q2 availability rate of 1.9 per cent, up from 1.6 per cent in Q1, as landlord market large-block spaces well in advance of vacancy, contributing to the rise in availability.
Despite the rise, rental rates increased quarter-over-quarter to $18.12 per square foot, up from $17.87 per square foot last quarter, due to persistent scarcity in the most attractive spaces.
Overall, rates have risen an average of 30 per cent each year from 2018 to 2023, 86 per cent in the past three years and 152 per cent in the past five years. The highest average net rents were found in GTA North at $18.48 per square foot. The most affordable area was GTA East, with average net rents at $15.95 per square foot.
Demand in the GTA continues to centre around logistics and distribution, with an increased focus on manufacturing and consumer goods and services.
According to the report, top lease transactions within the GTA signed during the second quarter of 2023 included Campbell Company’s 437,000-square-foot lease extension at 255 Chrysler Dr. in Brampton; Wesbell Logistics’ 264,000-square-foot renewal at 6135 Kennedy Rd. in Mississauga; and Riverside Natural Foods’ lease of 194,700-square-feet at 2243 Sheppard Ave. W. in North York.
Q2 completions totalled three million square feet across 16 buildings (39 per cent leased) throughout the GTA. The largest completion of the quarter was a 458,500-square-foot speculative distribution centre developed by Pure Industrial at 20 Whybank Dr. in Brampton. A further 74 buildings, totalling 18.7 million square feet, were under construction at the end of the second quarter, with 31 per cent preleased.
Most of the buildings under construction were in GTA West (61 per cent), while the North accounted for 23 per cent, East 12 per cent and Central four per cent. An additional 157 buildings were in the pre-construction stage, with the potential to add almost 55 million square feet (20 per cent already leased) across the GTA.