The departure of several big-box stores – including Target, Future Shop and Sony, among others – had several brokers concerned about filling such large spaces, but a new report by Colliers International suggests e-commerce retail operations could readily take over those properties.
The company’s report for the first quarter of the year said continued demand for warehouses and distribution centres will make filling those large square-footage spaces much easier as more retailers ramp up their e-commerce offerings.
“With the strengthening U.S. economy, there are positive forecasts that the volume of Canadian exports will improve and lead to growth in the manufacturing sector,” said Peter Garrigan, the vice president of business development for Colliers International. “However, properties 50,000 square feet and below are preferred by manufacturers due to lower development costs compared to larger properties, and the GTA is not ready to accommodate growth in this manufacturing sector due to the current limited supply of this size asset class.”
The company said more than 1.6 million square feet of industrial space was absorbed during the first quarter of 2015, most of it in big blocks – that is, properties measuring more than 200,000 square feet in size. Much of that space was located in the Greater Toronto Area’s west market.