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Market Report

Toronto Industrial Market Report

3Q 2024

Investor Confidence Remains Positive
As Industrial Sector Evolves

Softening demand pushing up vacancy rate. The rebalancing of Toronto’s industrial sector continued as of mid-2024. Space demand remained on a downward trajectory, with net absorption falling below zero for the first time since early 2020. This shift in demand has been driven by slower growth in industrial-intensive sectors amid elevated interest rates as well as Toronto’s higher cost of living curbing consumer spending. The Toronto West submarket experienced a more rapid decline, with a net total of 1.4 million square feet becoming vacant in Mississauga and Brampton combined during the first half of 2024. On the other hand, space demand fared better in Toronto North, potentially due in part to offering a lower cost for tenants. Preliminary data for the third quarter signals further moderation. Pre-leasing activity remained soft, with net absorption dipping deeper into negative territory. The vacancy rate is expected to continue climbing as a result, likely surpassing 3.0 per cent by year-end.
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