The Greater Toronto Area (GTA) industrial market has recorded its first decline in availability in more than two years, says Avison Young in a new report.

Availability dropped 70 basis points quarter-over-quarter to 4%. The shift underscores the market’s continued resilience amid strong demand, said Avison Young.

The GTA East submarket led the decline was its availability fell 150 bps, while the GTA North followed with a 90-bps drop. The tightening market was driven by robust leasing activity, resulting in 2.4 million square feet of positive absorption.

Demand remains strongest in sectors such as logistics and distribution, with manufacturing, consumer goods, and services also playing key roles. Sublease availability has stabilized but remains a notable component of the market, as companies continue to reassess their space requirements.

The availability decline coincides with a drop in the GTA industrial construction pipeline. The pipeline has significantly rebalanced, dropping from a peak of 19.7 million sf in the third quarter of 2022 to 7.3 msf currently. While the 2020–2025 period saw an annual average of 14 msf under construction—nearly double the 7.6-msf verage from 2015–2019—fewer new projects are now breaking ground.

With longer development timelines, the market may soon face a short-term supply shortage, said Avison Young.

Photo: Avison Young

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