Market Report
Toronto Industrial Market Report
3Q 2025
Bifurcation in Performance Amid
Differing Supply and Demand Dynamics
Select build types outperform. Small-bay assets are outperforming in Toronto, driven by scarcity, adaptability and more resilient tenant demand. Vacancy for this product remains well below larger bay distribution space amid shorter downtime between tenants and faster leasing velocity, supported by more local service providers that dominate the GTA’s economic base. Limited new development due to feasibility challenges has also tightened supply, allowing investors to increasingly target this segment for its stability. By contrast, large-bay warehouses face elevated vacancy and slower absorption tied to recent development waves, leaving performance uneven. As a result, small-bay industrial has emerged as the more defensive and growth-oriented investment
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