Q2 2021 Industrial Market Report
The Greater Toronto Area (GTA) industrial market continued to reach unfathomable heights this quarter as average net asking rents increased to $10.70 per square foot, up $0.33 quarter over quarter. A complete lack of available industrial product paired with rapid demand has led the availability and vacancy rates to drop further to 1.5% and 0.3%, respectively.
Despite the fundamental shift in global retail consumption continuing to drive demand for logistics, e-commerce, and supply-chain growth, industrial developers have withheld their commitment to finalizing lease agreements until they get closer to their project delivery date. Given the current market conditions, achieved rates are likely to be higher the longer developers can wait. This holding out period is crucial to developers as they look for ways to offset spiking construction costs brought on by the lack of essential construction materials.
With rental rates continuing to exceed expectations, many industrial tenants across the GTA are asking the question – how far can rents go?