INDUSTRIAL MARKET REPORT · DEMAND There’s no doubt that the demand for industrial product is...
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*Sales Representative JOHN PLANETA* Senior Vice President Global Integrated Logistics 416 798 6223 [email protected] GRACE KISHANDER* Team Lead, Client Services 416 798 6252 [email protected] CHIARA PLAMENCO Client Services Assistant 416 798 6279 [email protected] TED OVERBAUGH* Associate Vice President 416 798 6272 [email protected] J EFF HORD* Senior Sales Associate 416 798 6258 [email protected] DREW BAROOTES Sales Representative 905 234 0383 [email protected] MEET THE TEAM: Source: CBRE Research INDUSTRIAL MARKET REPORT FOURTH QUARTER 2017 The Canadian economy performed well on all cylinders for the first half of the year and economists are expecting this momentum to continue through Q4 of 2017. Mid-year Real GDP figures, according to Scotia Economics, rang in above predictions at 4.5%. At this rate, GDP growth is expected to reach approximately 3.1% for 2017. Majority of this expansion was supported by strong consumer spending over the first half of the year. Ontario’s strong housing market and recovering oil prices are factors that also contributed to the high economic performance. Canada also experienced two Bank of Canada rate hikes, taking the overnight rate to 1.0%, which lifted the dollar to 80 cents US. Since Canadian GDP growth relies heavily on consumer spending, sustainability is unlikely due to the rising interest rate environment. RISKS Renegotiations regarding NAFTA continue to carry a moderate level of uncertainty to the outlook. The possibility of further BoC rate increases could drive up borrowing costs and add to the already high household debt levels. The proposed minimum wage increase in Ontario has left many businesses from various sectors concerned about its implications. DEMAND There’s no doubt that the demand for industrial product is outstripping supply. Strong user demand across the GTA has translated into limited options for new and existing tenants in the marketplace. Positive absorption of 2.3M sq. ft. this quarter within the GTA market is a great indicator of strong leasing and selling activity. The availability and vacancy rates have both dropped from Q3 2016 and are now sitting at record lows of 2.3% and 1.0% respectively. Investor appetite has been and will likely remain healthy amid such fundamentals. PIRET’s acquisitions of big-box product in Vaughan, Brampton and Pickering is a strong example of institutional players seeking ways to secure prime assets before feeling the effects of another increase in BoC interest rates. Robust demand for small and mid-bay warehouses continues to be fueled by e-commerce and retail businesses wanting to be closer to their consumers. Overall, fundamentals for industrial real estate are strong for both leases and sales. However, the recent decline in manufacturing sales may disrupt demand for tenants in the manufacturing sector. SUPPLY In recent months, the largest and most anticipated speculative projects in the GTA have been the following: 11400 Steeles Ave E in Brampton (640,000 sq. ft.), 6 Cleve Crt in Halton Hills (564,824 sq. ft.), 7951 Fifth Line in Halton Hills (774,600 sq. ft.) and 2020 Logistics Dr (765,000 sq. ft.) in Mississauga. The last two are now under contract. RENT The Toronto North market bested Toronto West in terms of the highest average asking lease rate this quarter, posting $6.63 per sq. ft. The Toronto West market holds the highest average asking lease rate for properties with clear height over 26’ clear ($6.73 per sq. ft.). It is expected that new delivery of new supply in the next few quarters will drive up rental rates even further. Users currently in the market that are looking to expand, consolidate, or set up new business operations will be the main targets for landlords with ‘shovels in the ground’. If demand keeps outpacing supply, rents should continue their upward trajectory. Q3 2017 New Supply 763,249 sq. ft. Under Construction 4.2 million sq. ft. Avg. Ask Lease Rate $6.27 per sq. ft. Avg. Ask Sale Price $142.26 per sq. ft. *Arrows indicate change from previous quarter Toronto’s industrial market continues to impress. Demand is outpacing supply in most major submarkets. Figure 1: GTA Fundamentals - Historical Analysis Net Absorption and New Supply (MSF) Net Absorption New Supply Availability Rate 10-Year Average Availability Rate Availability Rate (%) 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 Q1 2011 Q2 2011 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 Q3 2017 Q3 2016
Transcript of INDUSTRIAL MARKET REPORT · DEMAND There’s no doubt that the demand for industrial product is...
*Sales Representative
JOHN PLANETA*Senior Vice President
Global Integrated Logistics 416 798 6223
GRACE KISHANDER*Team Lead, Client Services
416 798 [email protected]
CHIARA PLAMENCOClient Services Assistant
416 798 [email protected]
TED OVERBAUGH*Associate Vice President
416 798 [email protected]
JEFF HORD*Senior Sales Associate
416 798 [email protected]
DREW BAROOTESSales Representative
905 234 [email protected]
MEET THE TEAM:
Source: CBRE Research
INDUSTRIAL MARKET REPORTFOURTH QUARTER 2017
The Canadian economy performed well on all cylinders for the first half of the year and economists are expecting this momentum to continue through Q4 of 2017. Mid-year Real GDP figures, according to Scotia Economics, rang in above predictions at 4.5%. At this rate, GDP growth is expected to reach approximately 3.1% for 2017.
Majority of this expansion was supported by strong consumer spending over the first half of the year. Ontario’s strong housing market and recovering oil prices are factors that also contributed to the high economic performance. Canada also experienced two Bank of Canada rate hikes, taking the overnight rate to 1.0%, which lifted the dollar to 80 cents US. Since Canadian GDP growth relies heavily on consumer spending, sustainability is unlikely due to the rising interest rate environment.
RISKS
Renegotiations regarding NAFTA continue to carry a moderate level of uncertainty to the outlook.
The possibility of further BoC rate increases could drive up borrowing costs and add to the already high household debt levels.
The proposed minimum wage increase in Ontario has left many businesses from various sectors concerned about its implications.
DEMAND
There’s no doubt that the demand for industrial product is outstripping supply. Strong user demand across the GTA has translated into limited options for new and existing tenants in the marketplace. Positive absorption of 2.3M sq. ft. this quarter within the GTA market is a great indicator of strong leasing and selling activity. The availability and vacancy rates have both dropped from Q3 2016 and are now sitting at record lows of 2.3% and 1.0% respectively.
Investor appetite has been and will likely remain healthy amid such fundamentals. PIRET’s acquisitions of big-box product in Vaughan, Brampton and Pickering is a strong example of institutional players seeking ways to secure prime assets before feeling the effects of another increase in BoC interest rates.
Robust demand for small and mid-bay warehouses continues to be fueled by e-commerce and retail businesses wanting to be closer to their consumers. Overall, fundamentals for industrial real estate are strong for both leases and sales. However, the recent decline in manufacturing sales may disrupt demand for tenants in the manufacturing sector.
SUPPLY
In recent months, the largest and most anticipated speculative projects in the GTA have been the following: 11400 Steeles Ave E in Brampton (640,000 sq. ft.), 6 Cleve Crt in Halton Hills
(564,824 sq. ft.), 7951 Fifth Line in Halton Hills (774,600 sq. ft.) and 2020 Logistics Dr (765,000 sq. ft.) in Mississauga. The last two are now under contract.
RENT
The Toronto North market bested Toronto West in terms of the highest average asking lease rate this quarter, posting $6.63 per sq. ft. The Toronto West market holds the highest average asking lease rate for properties with clear height over 26’ clear ($6.73 per sq. ft.). It is expected that new delivery of new supply in the next few quarters will drive up rental rates even further. Users currently in the market that are looking to expand, consolidate, or set up new business operations will be the main targets for landlords with ‘shovels in the ground’. If demand keeps outpacing supply, rents should continue their upward trajectory.
Q3 2017 New Supply763,249 sq. ft.
Under Construction4.2 million sq. ft.
Avg. Ask Lease Rate$6.27 per sq. ft.
Avg. Ask Sale Price$142.26 per sq. ft.
*Arrows indicate change from previous quarter
Toronto’s industrial market continues to impress. Demand is outpacing supply in most major submarkets. Figure 1: GTA Fundamentals - Historical Analysis
Net Absorption and New Supply (MSF)
Net Absorption New Supply Availability Rate 10-Year Average Availability Rate
Availability Rate (%)
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West Drive
+ 93,000 sq. ft. on 9 acres for lease + Ability to expand building + M2 Zoning allowing outside storage + Fully secured yard and compacted yard + Exceptional rail access with two spurs
Gorvan Drive
+ 13,780 sq. ft. for lease + Freestanding facility + High power + Well located with many amenities nearby + Close to Highway 401, 403, 410
Laird Road
+ 47,000 sq. ft. Head Office + Shipping accommodates 53’ trailers + 25,000 sq. ft. of office + 90 Car parking spaces + 13,000 sq. ft. of office can be leased separately
Rexdale Boulevard
+ 45,000-113,000 sq. ft. for lease + Excellent bulk warehouse and distribution space + Clean warehouse with trailer parking + Easy access to Highways 401, 409, 427 + Low cost solution + Great shipping
Humberwest Parkway
+ 7.4 Acres for sale + Two parcels of land along busy Humberwest Parkway + Designated Business Corridor in official plan + Zoning is currently Agricultural + Both parcels to be sold together
new
new
+ 34,462 sq. ft. freestanding facility for Sale + Heavy power - 2000 amps + Secured shipping and yard area + Large oversize drive-in doors + Roof recently replaced over entire warehouse
Claireport CrescentUNDER CONTRACT
+ Land options: 2-20 Acres + Hard to find rail access - CN + Outside storage and rail + Zoned, serviced and ready + Located 10 minutes north Milton and 20 minutes to Mississauga and Brampton
+ Last unit remaining + Centrally located + Upgrades in unit + Ideal for manufacturing/warehousing
SALE | LEASE | DESIGN BUILD
3,358 SQ. FT. FOR LEASE
340 MAIN STREET NORTH, HALTON HILLS
14-16 STRATHEARN AVENUE, BRAMPTON
+ Fully fenced and gravelled yard + Outside storage + Site is fenced, secured, gravelled + 10-15 minutes to Brampton and Milton
2.78 ACRES FOR SALE
54 ARMSTRONG AVENUE, GEORGETOWN
+ Clean well maintained office space with combination of private offices, open space & boardroom
+ Close to downtown (Queen & Main) + Many uses considered + Longer term possible
2,500-5,400 SQ. FT. FOR SUBLEASE
42 STAFFORD DRIVE, BRAMPTON
new
+ Clean space in high quality complex + Minutes from Airport, hotels, Highway 401 and 427
+ Suitable for pharma/healthcare application
+ Combination of truck level and drive-in shipping
8,479 SQ. FT. FOR LEASE
2785 SKYMARK AVENUE, MISSISSAUGA
new
FOR SALE1321BRITANNIA ROAD E
M I S S I S S AU G A , O N TA R I O
THE OPPORTUNITY:± 8,000 sq. f t . f reestanding fac i l i tyZoning permits variety of uses: Auto service Auto/truck Sales & Leasing Contractor Service 2 overs ize dr ive - in doorsTruck level and drive - in shippingAsphalt recent ly replaced on ent ire lotFloor drains in warehouse
U P G R A D E D P O W E R6 0 0 A M P S
T 8 L I G H T I N G
2 O V E R S I Z E D R I V E - I N D O O R S 1 4 ’ X 1 4 ’
G R E A T E X P O S U R E
FOR SALE OVER 90%CONDITIONALLY SOLD11-13 EDVAC DRIVE
B R A M P TO N, O N TA R I O
THE OPPORTUNITY:5,200 sq. f t . for saleNew industr ial condo unitsLast remaining units
FOR SALE - 40 ACRES72015 SIDE ROAD
H A LTO N H I L L S , O N TA R I O
THE OPPORTUNITY:Great Buy and Hold OpportunityLocated next to major industr ial developmentsSignif i cant local infrastructure improvements underwayClose to planned 401/Tremaine interchangeFul l munic ipal services nearbyExis t ing house and shop onsi te
G R E A T R E C T A N G U L A RL A Y O U T
F U T U R E S T R A T E G I CE M P L O Y M E N T A R E A
C L O S E P R O X I M I T YT O H I G H W A Y 4 0 1
FOR SALE170 NANTUCKET BOULEVARD
S C A R B O R O U G H, O N TA R I O
THE OPPORTUNITY:+/- 26,550 sq. f t .Bui lding infrastructure overhauled in past 10 yearsRare automotive plazaHistor ical ly very l i t t le turnover in complexIdeal ly sui ted for condo convers ion
A V E R A G E U N I T2 , 2 0 0 S Q . F T.
C O M B I N A T I O N O FT / L & D / I S H I P P I N G
I D E A L F O R U S E R S /I N V E S T O R S
8 5 % T E N A N T E D ,W I T H F L E X I B L E L E A S E S
A L M O S T N O T R E E SO R C O N S T R A I N T S
401
L O C A T E D I N T H EH E A R T O F B R A M P T O N
B U I L D I N G U N D E R G O I N GS I G N I F I C A N T U P G R A D E S
T R U C K L E V E L &D R I V E - I N S H I P P I N G
MOREAVAILABLEPROPERTIESGTA WEST
UNDER CONTRACT
Humber Station Road, CALEDON
37 Acres5,500 sq. ft.
5700 Timberlea Boulevard, MISSISSAUGA
leased
20,010 sq. ft.
4800 Eastgate Parkway, MISSISSAUGA
leased
7.90 Acres
2943 Cedar Creek, AYR
RECENT TRANSACTIONS31 Rexdale Boulevard, ETOBICOKE
105,775 sq. ft.
25 Bramtree Court, BRAMPTON
26,000 sq. ft.
7951 Fifth Line, HALTON HILLS 4 Alfred Kuehne Boulevard, BRAMPTON
46,790 sq. ft.
leased
leased
leased
NEW INDUSTRIAL CONDO PROJECT
UNITS FROM3,500-15,000 SQ. FT.
PRIME BRAMPTONLOCATION
TRUCK LEVEL &DRIVE- IN SHIPPING
M2 ZONING
774,614 sq. ft.
sold
sold
sold
120,000 SQ. FT. DISTRIBUTION CENTRE
EASY HIGHWAYACCESS
ESFR SPRINKLERS
STRONG LOCALLABOUR POOL
GREAT SHIPPING
DREW BAROOTESSales Representative905 234 [email protected]
This disclaimer shall apply to CBRE Limited, Real Estate Brokerage, and to all other divisions of the Corporation (“CBRE”). The information set out herein, including, without limitation, any projections, images, opinions, assumptions and estimates obtained from third parties (the “Information”) has not been verified by CBRE, and CBRE does not represent, warrant or guarantee the accuracy, correctness and completeness of the Information. CBRE does not accept or assume any responsibility or liability, direct or consequential, for the Information or the recipient’s reliance upon the Information. The recipient of the Information should take such steps as the recipient may deem necessary to verify the Information prior to placing any reliance upon the Information. The Information may change and any property described in the Information may be withdrawn from the market at any time without notice or obligation to the recipient from CBRE. CBRE and the CBRE logo are the service marks of CBRE Limited and/or its affiliated or related companies in other countries. All other marks displayed on this document are the property of their respective owners. All Rights Reserved. Mapping Sources: Canadian Mapping Services [email protected]; DMTI Spatial, Environics Analytics, Microsoft Bing, Google Earth
CBRE Limited | 5935 Airport Road | Suite 700 | Mississauga, ON | L4V 1W5| T 416 674 7900 | F 416 674 6575
JOHN PLANETA*Senior Vice PresidentGlobal Integrated Logistics416 798 [email protected]
TED OVERBAUGH*Associate Vice President416 798 [email protected]
JEFF HORD*Senior Sales Associate416 798 [email protected]
GRACE KISHANDER*Team Lead, Client Services416 798 6252 [email protected]
CHIARA PLAMENCOClient Services Assistant416 798 [email protected]
*Sales Representative
FOR MORE INFORMATION PLEASE CONTACT:
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