- What Availability in the GTA industrial market continues to rise, Avison Young said
- Why 2.4m sq ft of space hit the market region-wide as new buildings reached completion
- What next Another 7.3m sq ft of industrial space is expected to come online in the GTA
Industrial availability in the Greater Toronto Area rose to its highest level in nearly a decade, Avison Young said in a regional market update for the final quarter of 2024.
The availability rate hit 4.7% in Q4, the highest it’s been in the GTA since early 2015 when the rate stood at 4.8%.
Throughout the quarter, 2.4m sq ft of industrial space was added to the market. This is just a fraction of the roughly 35m sq ft of industrial space that has come online in the GTA since the third quarter of 2022. At that time, the region’s industrial availability rate was below 1% due to pandemic-fueled demand for warehouse and distribution centres.
Although investors continue to fancy logistics and distribution facilities for acquisitions, the average sale price for industrial properties dipped to $362/sq ft in Q4.
Rents, meanwhile, which have which have risen 51% in the last three years, slipped 3.5% year over year. Quarter over quarter, the average net asking rate in the GTA dropped 0.7 %, or 13 cents/sq ft, to land at $17.73/per sq ft during Q4.
“Rental rates are expected to hover around current levels as the explosive rental growth experienced in the past three years is not sustainable given the current rising availability rates,” Avison Young said.
Across the region, 2.1m sq ft of industrial space lay vacant by the end of 2024, with the brokerage projecting another 35 industrial buildings totaling 7.3m sq ft under construction — just 8% of which is pre-leased — to reach completion in the near future.
Half of those unfinished projects are in the western GTA, including regional heavyweights Brampton and Mississauga. Another 30% is in the north, where some 1.6m sq ft of construction is occurring in Markham.
More than 1m sq ft of new space is reaching completion in the eastern GTA, much of it in Whitby.
Although there is only 477,000 sq ft of industrial space under construction in Toronto — all of which is in Etobicoke — 17 industrial buildings are in the city’s construction pipeline, totaling 3.3m sq ft of space.