Greater Toronto Area industrial real estate vacancy approached a nine-year high in the second quarter, says a Newmark report.

Canada’s largest industrial real estate market posted its highest vacancy level since late 2015. But vacancy was a modest 2.3%, indicating that the market remains tight.

Between mid-year 2017 and 2023, vacancy did not exceed 2%, according to the report.

Sublease deals spiked during the second quarter of 2024 as more tenants continued to right-size their businesses.

“While new deals tended to be fewer and smaller on average, those that occurred often involved tenants securing more suitable space in terms of size/location as options improved,” said Newmark.

Halton recorded the highest vacancy level at 4.9%, while Peel (2.7%) and Durham (2.3%) ranked second and third, respectively.

Toronto had the lowest vacancy rate (1.4%), followed by York (1.5) as about 13.1 million square feet remained under construction after record new supply was delivered in 2023.

Estimated asking rates dipped 6.5% after peaking at mid-year 2023.

The report was written by Andrew Petrozzi, Newmark’s head of Canadian research.

Photo: Courtesy of Newmark