Midwestern Ontario’s industrial market continued its strong performance throughout 2019, as availability decreased 30 bps year-over-year to 1.9%.
Despite an active quarter, the market recorded a negative net absorption of 184,962 sq. ft. This is partly due to the addition of some larger spaces to the market and the completion of two new builds in Brantford and Cambridge which brought 95,000 sq. ft. of new supply to the market.
Compared to the previous quarter, new projects in the pipeline have doubled from 521,919 sq. ft. to 1,066,039 sq. ft. in Q4 2019 as many projects broke ground this quarter. All upcoming industrial space are focused in the Cambridge, Branford, and Guelph submarkets, and is slated to enter the market in 2020.
Since Q4 2018, average net rental rates have increased rapidly by 14.9% to a record high of $6.69 in the end of 2019. On a submarket level, both the Cambridge and Brantford submarkets completed Q4 2019 with the highest quarterly net rental rate growth, increasing by 14.4% and 4.0% to $7.53 and $5.68 respectively.