Toronto Industrial Investment Forecast
Online Shopping Growth a Catalyst for Exceptionally Tight Conditions in the GTA
Expanding logistics firms trim availability to a historic low. As e-commerce sales climb within the GTA, logistics firms and distributors are broadening operations in the region. This has placed additional downward pressure on vacancy in a market that already recorded sub-2 per cent availability prior to the pandemic. Entering this year, more space was under construction than available in Toronto, contributing to very strong pre-leasing amid a lack of existing options. The high probability of new builds leasing quickly has led to a spike in industrially zoned land prices, which has pressured some developers into expanding existing sites upward, rather than build new space in more outlying areas. Meanwhile, the expanding East Toronto corridor is reporting the strongest rent growth figures and lowest availability of the GTA submarkets, due to the area’s connectivity to other eastern Canadian and American markets. H&M recently signed a lease to fill roughly 700,000 square feet in the eastern city of Ajax, highlighting retailer interest in large-scale facilities here, as a disrupted global supply chain prompts stores to hold more stock.