Q4 2024 GREATER TORONTO AREA INDUSTRIAL MARKET REPORT

WORKPLACE

In the fourth quarter of 2024, the GTA Industrial vacancy rates increased from 2.8% to 3.2%, with projections suggesting a continued rise to 3.5% by Q1 2025. Availability rates also moved upward, from 4.3% to 4.7%.

The average net rate has declined quarter-over-quarter, now standing at $17.42 per square foot. The total inventory increased to approximately 782 million square feet, reflecting the addition of new space to the market.

While tenants are finding opportunities to negotiate favourable lease terms, rising costs continue to place strain on small and medium-sized businesses. As some companies struggle to adapt, landlords are refining their strategies, with concessions like free rent becoming more common. Specialized industries and companies relying on high-cost manufacturing or distribution models are facing unique challenges, reshaping demand across the sector.

Looking forward, the recent rate cuts from the Bank of Canada are expected to continue to stimulate market activity, particularly in the sales sector. While larger, well-capitalized companies are more insulated from rising rent costs, small to medium-sized tenants continue to face significant financial pressure. As the market evolves, tenants are advised to act quickly to capitalize on the current favourable conditions. Additionally, the upcoming Canadian election and potential tariff disputes with the U.S. could introduce new uncertainties, impacting the broader economic and industrial landscape.

What does all this mean for tenants? Download the full Market Report to find out.

January 29, 2025

TRANSACTION MANAGEMENT