Q1, 2019 INDUSTRIAL MARKET REPORT GTA rents rise to historic highs GTA Fundamentals - Historical Analysis Net Absorption New Supply Availability Rate 10-Year Average Availability Rate AVAILABILITY RATE (%) NET ABSORPTION & NEW SUPPLY (MSF) 7 6 5 4 3 2 1 0 -1 -2 -3 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0 -1 -2 -3 Q4 2011 Q2 2012 Q2 2013 Q1 2013 Q4 2012 Q4 2013 Q2 2014 Q3 2014 Q1 2015 Q3 2015 Q3 2011 Q1 2012 Q3 2012 Q3 2013 Q1 2014 Q4 2011 Q2 2015 Q4 2015 Q1 2016 Q2 2016 Q4 2016 Q1 2017 Q2 2017 Q4 2017 Q3 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q3 2016 Avg. Ask Lease Rate $7.15 PER SQ. FT. Avg. Ask Sale Price $194.04 PER SQ. FT. Under Construction 6,599,733 SQ. FT. New Supply 931,508 SQ. FT. *Arrows indicate change from previous quarter Market conditions in the Greater Toronto Area (GTA) remain extremely tight with the availability rate maintaining its record low value of 1.6% & the vacancy rate posting an all-time low of 0.6%. For the first time in history, the average asking lease rate for the GTA has risen above $7.00 per sq. ft., appreciating to $7.15 per sq. ft. This represents an 11.4%, or $0.73 per sq. ft., year-over-year increase. The $0.73 per sq. ft. nominal value marks the largest year-over-year absolute change ever recorded in the GTA. Upward pressure on rental rates are expected to persist in 2019. Due to increasing rental rates and a lack of available space, some landlords, mainly institutional owners, are seeking longer lease terms. This has resulted in an average lease term of 66 months for deals exceeding 25,000 sq. ft. in 2018. Comparatively, the average lease term was recorded at 62 months in both 2016 and 2017. Moreover, brokers are finding that deal consummation is taking longer than in previous years as tenants become acclimated to the changing market. Larger tenants are leveraging their covenant, position and relationship with owners as an attempt to lower their rent. Other contributing factors for a prolonged deal consummation include procurement and design for automation and upstream contract executions. The year closes with 5,752,487 sq. ft. of new supply introduced to the GTA. This number exceeds both the year - end 2016 and 2017 numbers of 4,706,368 sq. ft. and 3,918,570 sq. ft., respectively. Currently, there is 6,599,733 sq. ft. of new supply under construction. Recently, developers have announced their intentions to have further speculative builds in Halton Hills, Milton, Oshawa and Whitby by year-end 2020. Although much of these developments have yet to break ground, it is expected these projects will introduce over 3 million sq. ft. on a pure speculative basis in the aforementioned markets. More than ever, tertiary markets are being viewed as viable options as developable land in primary markets are further limited. Concerns for a sustainable labour pool in these markets are expected to be mitigated by automation advancements that offset the need for a large workforce. The average net asking lease rate increased for a seventh consecutive quarter, hitting a record high of $7.15 per sq. ft.
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Q1, 2019 INDUSTRIAL MARKET REPORT - Commercial Real Estate ... · 1290 Aimco Boulevard, MISSISSAUGA 12,056 sq. ft. SOLD 1393 South Service Road, OAKVILLE 10,000 sq. ft. LEASED 1880
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Q1, 2019
INDUSTRIAL MARKET REPORTGTA rents rise to historic highs
GTA Fundamentals - Historical Analysis
Net Absorption New Supply Availability Rate 10-Year Average Availability Rate
AVAI
LABI
LITY
RAT
E (%
)
NET A
BSOR
PTIO
N &
NEW
SUPP
LY (M
SF) 7
6
5
4
3
2
1
0
-1
-2
-3
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0
-1
-2
-3
Q4 20
11
Q2 20
12
Q2 20
13Q1
2013
Q4 20
12
Q4 20
13
Q2 20
14Q3
2014
Q1 20
15
Q3 20
15
Q3 20
11
Q1 20
12
Q3 20
12
Q3 20
13
Q1 20
14
Q4 20
11
Q2 20
15
Q4 20
15Q1
2016
Q2 20
16
Q4 20
16Q1
2017
Q2 20
17
Q4 20
17Q3
2017
Q1 20
18Q2
2018
Q3 20
18Q4
2018
Q3 20
16
Avg. Ask Lease Rate$7.15 PER SQ. FT.
Avg. Ask Sale Price$194.04 PER SQ. FT.
Under Construction 6,599,733 SQ. FT.
New Supply931,508 SQ. FT.
*Arrows indicate change from previous quarter
Market conditions in the Greater Toronto Area (GTA) remain extremely tight with the availability rate maintaining its record low value of 1.6% & the vacancy rate posting an all-time low of 0.6%.
For the first time in history, the average asking lease rate for the GTA has risen above $7.00 per sq. ft., appreciating to $7.15 per sq. ft. This represents an 11.4%, or $0.73 per sq. ft., year-over-year increase. The $0.73 per sq. ft. nominal value marks the largest year-over-year absolute change ever recorded in the GTA. Upward pressure on rental rates are expected to persist in 2019. Due to increasing rental rates and a lack of available space, some landlords, mainly institutional owners, are seeking longer lease terms. This has resulted in an average lease term of 66 months for deals exceeding 25,000 sq. ft. in 2018. Comparatively, the average lease term was recorded at 62 months in both 2016 and 2017. Moreover, brokers are finding that deal
consummation is taking longer than in previous years as tenants become acclimated to the changing market. Larger tenants are leveraging their covenant, position and relationship with owners as an attempt to lower their rent. Other contributing factors for a prolonged deal consummation include procurement and design for automation and upstream contract executions.
The year closes with 5,752,487 sq. ft. of new supply introduced to the GTA. This number exceeds both the year - end 2016 and 2017 numbers of 4,706,368 sq. ft. and 3,918,570 sq. ft., respectively. Currently, there is 6,599,733 sq. ft. of new supply under construction.
Recently, developers have announced their intentions to have further speculative builds in Halton Hills, Milton, Oshawa and Whitby by year-end 2020. Although much of these developments have yet to break ground, it is expected these projects will introduce over 3 million sq. ft. on a pure speculative basis in the aforementioned markets. More than ever, tertiary markets are being viewed as viable options as developable land in primary markets are further limited. Concerns for a sustainable labour pool in these markets are expected to be mitigated by automation advancements that offset the need for a large workforce.
The average net asking lease rate increased for a seventh consecutive quarter, hitting a
record high of $7.15 per sq. ft.
340 MAIN STREET N | HALTON HILLS | ON
• Halton Hills newest Industrial Park totaling 55 acres
• Hard to find rail access and outside storage• Lands available for sale or design build • Zoned EMP and fully serviced• Phase 1 complete. Phase 2 ready.
BROCK ROAD & MCLEANP U S L I N C H, O N
• 25 - 33 acres• Divisible to 10 acres• Allows transportation• Quick 401 access• Located at 401 & Highway 6, 15 minutes
past Milton
4 ALFRED KUEHNE BOULEVARDB R A M P TO N, O N
• Flexible sizes: 2,750 sq. ft. - 12,500 sq. ft.• Truck level & drive-in shipping• Building upgrades: New roof & asphalt,
landscaping work, exterior LEDs• 18’ clear height• GO station next door• Rare M2 zoning
1771 AIMCO BOULEVARDM I S S I S S AU G A , O N
• 94,875 sq. ft.• More than 4.5 acres of extra land• Roof replacement program in place• Multiple street access points• Ideal site configuration• Large shipping court
489 HIGHWAY 8H A M I LTO N, O N
• Turnkey transport terminal • Building set up for truck & trailer repair with
drive-in bays, wash bay & pit bay• Fully graveled, fenced & lit yard with 3 gated
access points• New Tim Hortons & Shell station across the
street
AVAILABLE FOR SALEGTA WEST INDUSTRIAL SALE STATS Q1 2019
AVERAGE MORTGAGE RATE
AVAILABLE FOR SALE (SQ.FT.)
AVERAGE ASKING PRICE (/SQ.FT.)
INDUSTRIAL CAP RATE CLOSED TRANSACTIONS
3.95% 1,048,818 $186.45 5.17% 39
AVAILABLE LAND
GTA WEST LAND STATS Q1 2019
AVERAGE LAND PRICE ($/ACRE)DEVELOPMENT CHARGES
MILTON BRAMPTON MISSISSAUGA ETOBICOKE
1,196,429 $17.20 $19.25 $22.63 $1.07
• 40 acres of great buy and hold opportunity• Located next to major industrial
developments• Significant local infrastructure improvements
underway• Close to planned 401/Tremaine interchange• Full municipal services nearby• Existing house and shop onsite
7201 5 SIDE ROAD
• 9,352 sq.ft. on 0.56 acres• Small, well maintained freestand• Easy access to transit and highways 401 &
403 interchanges
NEW
1355 FEWSTER DRIVEM I S S I S S AU G A , O N
H A LTO N H I L L S , O N
12833 HIGHWAY 50B O LTO N, O N
• 7,250 sq.ft. for lease• Commercial space along busy • Hwy 50 in Bolton• High traffic location next to major retailers• Yard space is fenced and secured• Perfect for equipment rental company,
contractor, building supplies
25 TYLER STREETC A M B R I D G E , O N
• +/- 143,695 sq. ft. for lease• 28’ warehouse with ESFR sprinkler• Easy hwy access & hwy 401 exposure• Space can be divided - units starting at
20,000 sq. ft.• New construction | Spring 2019 delivery
• 45,000 sq.ft. for Sub-Lease• Central location • Access to Highway 401 & Downtown• High demand area• Good clear height• Anti-static floors & air-conditioned warehouse
95 BRIDGELAND AVENUE | NORTH YORK | ON
• 2,830 sq.ft. for lease • Quick access to 400 series highways• Abundant parking• Access to transit, BRT & many amenities• 4 private offices
5535 EGLINTON AVENUE W. SUITE 218TO R O N TO, O N
AVAILABLE FOR LEASE
GTA WEST INDUSTRIAL LEASE STATS Q1 2019
TOTAL AVAILABLE (SQ. FT.) ABSORPTION YTD AVAILABILITY RATE AVERAGE ASKING RATE AVERAGE TMI
6,694,067 7,524,369 2.1% $7.17 $3.55
INDUSTRIAL CONDOS FROM 2,000 SQ. FT.THENEXT BIGTHING
CENTRAL BRAMPTON LOCATION
T/L AND D/I SHIPPING2,000 - 20,000 SQ. FT.
VERY WELLMAINTAINED PARK
• 1,778 sq. ft. for lease• Located in a sought after Mississauga node• Abundant parking• Close to major highways and amenities• T/L door is 53’ accessible• Clean warehouse space• Possibility for earlier occupancy
TIMBERLEA BOULEVARD, UNIT#3M I S S I S S AU G A , O N5700
NEW
6186 Mayfield Road, CALEDON
12 acres
I
SOLD
7845 Heritage Road, BRAMPTON
149,632 sq. ft.
LEASE
D
1290 Aimco Boulevard, MISSISSAUGA
12,056 sq. ft.
SOLD
1393 South Service Road, OAKVILLE
10,000 sq. ft.
LEASE
D
1880 Matheson Blvd E, MISSISSAUGA
LEASE
D
216,439 sq. ft.
1300 Aimco Boulevard, MISSISSAUGA
SOLD
15,047 sq.ft.
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