Toronto Industrial Market Report

Space demand on the rise. Net absorption turned positive from the final quarter of 2024 through the first quarter of 2025, indicating leasing activity may have bottomed out. The Toronto East and Toronto West submarkets were the top performers, absorbing 3.4 million square feet of industrial space over this six-month period. Lower interest rates were likely the primary driver of this upward momentum, boosting the need for space in industrial-intensive sectors. Notably, demand held firm in the first three months of the year, even as on-and-off tariff threats from the U.S. dampened business confidence. While the future path of U.S. trade policy remains uncertain, the resilience of space demand in the first quarter points to a positive outlook for 2025, provided trade tensions do not further escalate.