(To read more on the industrial market, click here.)
TORONTO-In deals totaling more than 170,000 sf, ProLogis has landed two more tenants for Mississauga Gateway Centre, a modern industrial park near Pearson International Airport. Developed on a speculative basis shortly after ProLogis acquired the 100-acre parcel in 2004, the 987,000 sf in three buildings is now 85% occupied, according to the park's market officer, Jeff Miller.
"I think we're off to a great start," Miller tells GlobeSt.com. "We've had good activity on the remaining space and for our Phase II construction," another three-building endeavor that recently broke ground and is slated for completion by this autumn. When finished, the complex will total 1.8 million sf.
The larger of the two leases was struck by Southwire Canada, a manufacturer of electrical wire and cable, who committed to 130,000 sf. Southwire will use the building at 420 Courtneypark Dr. West to supplement expanding manufacturing opportunities in Canada. Also, Absolute Transportation has leased 40,000 sf for its Canadian headquarters and to service a leading client in the telecommunications equipment industry. That company, which has had a presence in the market for nearly 20 years, will move into 200 Courtneypark Dr. West in a few weeks.
Miller says the transactions "further validate Mississauga Gateway Centre as a strategic distribution location in the Greater Toronto area." Various factors have made Toronto a popular anchor for logistics providers, he says. Toronto's centralized location, its growing population and an air/highway/rail infrastructure that creates an efficient distribution network make the city popular for such uses, Miller explains, with an estimated 700 million sf of industrial space.
Despite the substantial inventory, which makes Toronto the third largest distribution market on the continent, Miller says the vacancy rate has remained steady at 5%, with rental rates typically in the $6 per sf range. ProLogis is confident that the market will not be overbuilt, he says, due to geographic restraints and governmental policies aimed at keeping supply in balance. Only about 1% of the existing industrial space in Greater Toronto is replaced with new construction every year, Miller estimates. "The market dynamics here are attractive," he says, so much so that ProLogis is considering other development opportunities there, options he declined to identify.
Mississauga Gateway Centre has quick access to five major highways and is less than 10 minutes from the infield cargo area at Pearson, notes Miller, adding that tenants have been attracted by the state-of-the-art facilities created by ProLogis.
"We're well known," he acknowledges, establishing credibility both as a leading industry player and via relationships forged from other operations. Southwire, for example, already leases 160,000 sf from ProLogis in Dallas, TX.
Brokers representing Southwire were Stewart Metcalfe, Ron Jasinski and Sean Boswell of Colliers. Absolute Transportation was represented by Larry D'Orsay and Matt D'Orsay of Indusite Real Estate Corp. Miller handled negotiations in-house for the landlord.
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