GTA Industrial Overview

GTA Industrial Overview Despite the bad news on the manufacturing side, the GTA industrial market, which is being driven by the transportation and warehousing sector, has experienced continued strong demand. Overall GTA vacancy has decreased by 120 bps year-over-year to end 2018 at 1.9%. To keep up with demand, construction activity has been equally strong. There has been approximately 5.0 million SF of new supply delivered over the last year, with an additional 9.5 million SF currently under construction.

Unfortunately this construction activity has not been enough to keep up with demand, and furthermore, the GTA is now facing land shortages, which will impact the amount of future construction activity. Projections show that the GTA industrial vacancy rate will continue edging down to approximately 1.3% to 1.5% early in 2019, before starting to climb slightly back above the 2.0% range by 2020. There remains strong demand from transportation, warehousing and logistics tenants, as well as non-traditional tenants focused on film and cannabis industries, and as a result of this strong demand and limited supply, the average net asking rental rate continues to increase, up 9.3% year-over-year, to $7.07/SF per annum at year-end 2018.