SW Ontario Industrial Market Report

Demand reached historic levels. Between 2019 and 2022, Southwestern Ontario saw record levels of absorption, which helped push the vacancy rate down 100 basis points. As a result, annual rent growth reached 34 per cent last year, which was the largest gain among Canada’s major metros. This robust performance was a byproduct of e-commerce related demand spilling over from the Greater Toronto Area. With the average asking rent roughly 30 per cent below that of Toronto, many tenants who were priced out of the GTA turned to Southwestern Ontario. Looking forward, this trend is likely to continue. In addition, new drivers are emerging within the manufacturing sector, which will likely further advance demand over the coming years. Recently, the metro has experienced increased attention as venture capital firms and government bodies have invested in the region, with the hopes of solidifying it as a an electric vehicle battery manufacturing hub. This initiative was recently aided by Volkswagen announcing St. Thomas as its first North American EV battery plant, which complements Stellantis’ recently announced plant in Windsor.