Q2 2023 Toronto Industrial Market Report

The industrial market for the second quarter of 2023 continues to see vacancy rates of sub-one percent levels, while availability continues to sit at 1.5 percent. Lease rates, quarter-over-quarter, increased by two percent, bringing the average asking rent to $18.32 per square foot. The Bank of Canada’s recent interest rate increases have affected the sale price of industrial buildings, resulting in a decrease in the number of transactions, along with the average selling price. Buyers needing financing to purchase the asset will need to pay significantly more than they would have paid a year and a half ago on the interest payments. Looking ahead, we anticipate a small increase in availability as more space is slated to hit the market in 2024, which will affect availability rates and push rental rates to level off.