TORONTO, February 5, 2014 -- Toronto Real Estate Board Commercial Network Members reported 427,926 square feet of leased industrial, commercial/retail and office space on a per square foot net basis through the TorontoMLS system in January 2014 (for properties where pricing was disclosed). This result was virtually unchanged compared to 428,513 square feet of space leased in January 2013.
The amount of industrial space leased was up by almost 11 per cent on a year-over-year basis to 356,440 and accounted for 83 per cent of total leased space. The average industrial lease rate was similar to last year, with an average $5.21 per square foot net in January 2014 compared to $5.31 per square foot net a year earlier. Average lease rates were down for the commercial/retail and office segments of the market. These declines were largely due to a year-over-year change in the mix of office and commercial properties sold.
“The industrial segment of the market is important in the context of the southern Ontario economy, including the manufacturing sector. If we continue to see an increase in leased industrial space this year, this could indicate that industrial firms are anticipating an increase in demand for their products and therefore are looking to take on more space to help accommodate increased production,” said Commercial Committee Chair Cynthia Lai.
There were 42 combined industrial, commercial/retail and office sales in January 2014, for which pricing was disclosed. This result was in line with 43 transactions in January 2013. The year-over-year change in average selling prices was mixed on a per square foot basis. The average selling price for industrial properties was much higher this past January compared to 2013, because this year’s transactions involved smaller properties compared to last year.. Smaller properties tend to sell for more on a per square foot net basis.
Commercial/retail pricing was basically unchanged compared to January 2013 and office pricing was down by about nine per cent year-over-year.
“The consensus view is that the Canadian economy is expected to grow at a faster pace in 2014 compared to 2013. The increased rate of growth should be driven by an improvement in exports, due to a strengthening US economy and weaker Canadian dollar vis-à-vis the US. This should bode well for the commercial real estate market, and in particular the industrial sector,” added Ms. Lai.
January 2014: Per Square Foot Net Commercial Leasing Summary
Lease Transactions Completed on a Per Square Foot Net Basis with Pricing Disclosed on TorontoMLS
Leased Square Feet
Average Lease Rate
Source: TREB Commercial Division
January 2014: Commercial Sales Completed with Pricing Disclosed on TorontoMLS
Sales (Price Disclosed)
Avg. Sale Price Per Sq. Ft. (Pricing Disclosed)