Newmark Knight Frank Devencore

Newmark Knight Frank Devencore

September 23, 2010 10:05 ET

Newmark Knight Frank Devencore: Demand for Industrial Space Begins to Increase Across GTA

Best Tenant Opportunities are Region- and Building-Specific

TORONTO, ONTARIO--(Marketwire - Sept. 23, 2010) - In its Industrial Real Estate Market Report published today, Newmark Knight Frank Devencore reported that, by the end of 2009, overall industrial vacancy rates in the Greater Toronto Area (GTA) had climbed well above 6% and rents had fallen in most regions. Since that time, however, there has been a steady increase in space absorption and rents are now beginning to stabilize. Asking rates for large blocks of bulk space are currently in the $4.50-$5.50 per-square-foot range, although these costs may vary from municipality to municipality. After an extended period during which even financially healthy tenants adopted a wait-and-see attitude, growth should once again resume and bring renewed vigour to the industrial real estate markets.

"With vacancy rates higher than they have been in a number of years, many landlords are seeking stability and are thus increasingly interested in signing quality tenants to longer-term commitments," said Allan Schaffer, President / Broker of Record of Devencore Realties Corporation Canada Limited, Brokerage. "While landlords are not holding any fire sales, they are willing to show greater flexibility in leasing negotiations. As is the case in the office market, the best opportunities for tenants will be found on a region-by-region and building-by-building basis."

Devencore's report also made note of the shifting dynamic in the GTA's real estate investment market. Earlier in the decade, a number of entrepreneurial U.S. developers had made their presence strongly felt, but as the financial markets collapsed many of these investors left the market. As a result, the more traditional developers and landlords, including established Canadian pension fund managers, once again hold a dominant position in the marketplace. "These institutions are generally more focused on revenue stability over the longer-term, which means they can be more patient in securing quality tenants," Schaffer said. 

Nationally, the availability of industrial space increased in virtually every metropolitan region over the past 18 months, which in turn led to an easing of rental rates and a slowing of speculative development. Devencore notes, however, that the worst effects of the recession seem to be easing and corporate real estate activity is on the upswing in most markets across the country. For the rest of this year and into 2011, Devencore expects to see positive space absorption as the economy stabilizes further and begins to build momentum.

About Newmark Knight Frank Devencore

Devencore is the Canadian partner of Newmark Knight Frank, one of the largest independent real estate service firms in the world. Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution.

Headquartered in New York, Newmark Knight Frank and London-based partner Knight Frank operate from over 200 offices in established and emerging property markets on six continents. Last year, transactions were valued at more than $32 billion with annual revenues of over $811 million. With a combined staff of more than 6,300, this major force in real estate is meeting the local and global needs.

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Contact Information

  • Newmark Knight Frank Devencore
    Allan Schaffer
    President / Broker of Record
    416-366-0366, ext. 231
    Newmark Knight Frank Devencore
    Sylvie Bachand
    Director, Marketing and Communications
    514-392-1330, ext. 225