Market Report
Toronto Industrial Market Report
2026 Investment Forecast
Trade Resolution Key to Unlocking
Pent-Up Space Demand
Tenants awaiting greater clarity. Last year, Toronto was among the metros most affected by trade tensions. The region hosts much of Canada’s core manufacturing capacity in the steel and automotive sectors, along with a dense logistics network and supply chains that are deeply integrated with the United States. As a result, net absorption lagged behind completions, driving up vacancy across the metro. This trend was more notable in Toronto East — a submarket with a high concentration of manufacturing-oriented businesses. Looking ahead, trade relations with the U.S. will remain a key factor closely watched by tenants and investors. Greater clarity on trade policy or a resolution to the current dispute would likely encourage many businesses to reengage expansion and investment plans. Despite the uncertainty surrounding trade, an accommodative monetary backdrop should continue to support consumer spending, sustaining demand in the transportation, distribution and warehousing sectors. Meanwhile, fundamentals in the small-bay segment are expected to stay robust. These facilities are typically occupied by local businesses, which are more insulated from the trade-exposed volatility elsewhere in the economy.
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