Businesses seeking industrial space in the Greater Toronto Area are under increased pressure with the vacancy rate down to 2.7% at the end of the third quarter of 2017, from 3.4% a year earlier.
A report from Newmark Knight Frank shows that warehousing and e-commerce is driving demand for industrial real estate in the market. It says that some build-out suppliers are booked through 2021.
"Large industrial spaces with modern amenities and features, including clear heights of at least 32 and the ability to handle 53-foot trailers are in extremely short supply," said Sean Fiset, Vice President at NKF Devencore's Toronto West office. "In Mississauga and Brampton, which have the advantage of ready access to major transportation routes, this shortage is felt most strongly.”
Although there is new supply coming to market, Fiset highlights that around a third of the GTA’s available industrial units are not suitable for many businesses as they are only suitable for smaller operations.
"Approximately 3 million square feet of new space is scheduled to be delivered to the GTA industrial market over the next 12 months, but this will not address all of the pent-up demand," added Rob Renaud, Managing Principal/Broker of Record at NKF Devencore's Toronto West Office.
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