- What The average asking sales price for industrial properties started to trend down in the second quarter
- Why Many investors are waiting for further interest-rate cuts by the Bank of Canada before taking part in transactions
- What next Sales activity is expected to pick up before the end of the year if another federal rate cut is announced
Asking prices for industrial properties in major markets began to drop in the second quarter, while the average asking net rental rate contracted for the first time since 2011, CBRE said in a report out this week.
The national average asking price in the sector was $319/sq ft, down 1.7% year over year. However, several markets surpassed that. Vancouver saw the largest drop in asking prices at 8.7%, to $525/sq ft, while Montreal saw asking prices fall 5.2%, to $238/sq ft. Asking prices in Toronto were just 0.4% over the same period a year earlier, at $376/sq ft.
CBRE executive vice president Adrian Lee said industrial sales volumes have been trending down since 2023, as many investors await further interest-rate cuts before transacting.
“The majority of [investors’] challenge is the high cost of capital, and really this uncertainty over interest rates will continue to weigh on investment activities,” Lee told Green Street News.
Most of the notable property sales tracked by the brokerage during the second quarter of 2024 took place in the Greater Toronto Area. Oxford Properties unloaded a 331,000 sq ft logistics site at 2600 North Park Drive in Brampton to a private Ontario buyer for $110m, or $332/sq ft.
Meanwhile, Toronto-based Pure Industrial acquired four GTA warehouse properties totaling 600,000 sq ft – two in Scarborough and two in Brampton – from Alberta Investment Management for $149m.
Out west, Vancouver-based Bosa Properties snapped up an industrial park in Surrey, B.C., from CanFirst Capital Management for $93m, or $295/sq ft.
On the occupancy side, the national availability rate continued to climb, hitting 4.2% — the highest level since Q3 2017 and close to the 15-year historical average rate of 4.6%, according to the brokerage.
Average asking rents across the country dropped 2.1% year over year to $15.95/sq ft, representing the first year-over-year drop in more than 12 years, CBRE said. Declines were seen in Montreal (-8%), London (-6.9%), Vancouver (-4) and Toronto (-1.9).
