-  The industrial market was strong in the first quarter of 2007, with a rise in land prices and asking sale prices per square foot. Despite asking rent increases in many submarkets, the overall rate remained relatively unchanged with respect to the previous quarter.

-  Land prices and development charges continue to rise, causing an adverse impact on the pro-forma financial earnings of many developers.

-  Acquiring industrial property remains a high priority for both institutional and private capital investors.

-  Scarcity of serviced land continues to have a positive impact on land prices. Land acquisition by foreign investors remains strong.

-  Nine new projects added over 1.5 million square feet to the total inventory. Despite this increase, approximately 8.4 million square feet were absorbed.

-  Warehousing and distribution uses are driving the industrial market in the GTA. As the Canadian dollar strengthens, this trend will continue.

-  Industrial sales remain strong as investors and owner-occupants take advantage of relatively low capital costs. Low interest rates have caused many tenants to explore ownership as a more economically viable option.

Forecast

The market remains divided between newer inventory that offers clear heights of over 20 feet and older inventory offering much lower heights of approximately 12 feet. This difference can represent approximately $2.00 per square foot in asking net rental rates. As development continues to flourish, this distinction will become more pronounced.

To view the enitre report, please click on the PDF file below.

Contact David Bowden at 416-777-2200 for more information.

2007Q1 - GTA Industrial.pdf

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