Demand temporarily stalled by the coronavirus pandemic is likely to stimulate much-accelerated activity in Toronto’s industrial property segment over the next few months, according to Avison Young.
“The COVID-19 lockdown paused the Greater Toronto Area (GTA) economy for most of the second quarter,” Avison Young said in its just released Q2 Industrial Market Report. “The full impact will be revealed in the coming quarters, but pent-up demand is expected to sustain positive momentum for the industrial market.”
The average asking net rental rate in the region went up by 16% annually to $9.73 per square foot.
Over the course of the quarter, industrial availability in the GTA went up by 20 basis points to reach 1.9%. Avison Young said that a significant proportion of the increase was in the sub-50,000 sf (square feet) segment.
“Demand for quality space is expected to increase in the coming year,” Avison Young reported. “Despite the slow first half of the year, several significant deals were inked, mostly by e-commerce and food companies. Amazon bolstered its presence in the Central market – signing a deal for 635,000 sf – and leased 453,000 sf in GTA West.”
More than 2 million square feet (msf) of industrial space were completed in during thequarter.Approximately 80% of these are already pre-leased. Nearly 15 msf remained under construction across the GTA, with around 73.3% of these projected to be completed by year-end.