Industrial Market Report & ForecastColliers International | Greater Toronto Area S P R I N G

2010

$1.6 billion in annual revenue

1.1 billion SF under management

Over 12,000 professionals

294 offices in 61 countries

Colliers International Contacts

Scott Addison Executive Managing Director, Toronto 416.620.2800 Scott.Addison@colliers.com

Mary Mowbray Manager, Retail Practice Group 416.643.3740 Mary.Mowbray@colliers.com

John Arnoldi Managing Director, Office Practice Group, Toronto 416.643.3733 John.Arnoldi@colliers.com

Duerten Lindenbeck Senior Research Analyst 416.643.3764 Duerten.Lindenbeck@colliers.com

www.colliers.com/toronto

Colliers International Offices Serving the GTA:

Downtown Office

One Queen Street East,

Suite 2200

Toronto, Ontario

Canada, M5C 2Z2 416.777.2200

West Office

185 The West Mall,

Suite 1600

Toronto, Ontario

Canada, M9C 5L5 416.777.2200

North Office

245 Yorkland Blvd.,

Suite 200

Toronto, Ontario

Canada, M2J 4W9 416.777.2200

Burlington Office

1122 International Blvd.,

Suite 100B

Burlington, Ontario

Canada, L7L 6Z8 905.333.8849

We underestimate the tenacity of the market and its ability to withstand upheaval, as the reality of the roller coaster seldom matches the worst expectations and fears that we had when we were standing at the top looking down. The economy is now growing faster than predicted, and there is a definite sense of business confidence in the market.

With pent up demand for industrial space combined with a significant drop in vacancy and very little planned construction in the near future, rental rates should increase faster than expected. If availability rates return to 2007 levels and demand is strong, we expect to see a fairly quick return to an environment where new construction is again a viable business decision. The manufacturing industry is also beginning to recover and, as a result, we expect sufficient demand for industrial space due in part to a growing population in the Greater Toronto Area and hence a greater need for goods.

In this Colliers International Spring 2010 Industrial Market Report & Forecast, we have strived to provide you with market outlooks across the Greater Toronto Area, as well as knowledge grounded in detailed research analysis. However, I would not be surprised if we looked back in a short while to find that we outperformed our own expectations. It is our hope that this report it provides you with the insight and understanding to make confident business decisions over the coming months.

For those of you who would like to review our statistical tables or discuss forecast methodology in more detail, please contact Duerten Lindenbeck from our research team.

As always, we look forward to your questions and feedback.

Scott Addison Executive Managing Director, Toronto

Introduction

3 | Industrial Market Report & Forecast | Spring | 2010

Toronto Economic Overview

Despite the United States having experienced a shaky housing recovery, a sagging commercial real estate sector, and sky-high unemployment, a string of positive economic data in Canada suggested that the Canadian economy continued to move along smoothly on its path to recovery. Overall, real gross domestic product (GDP) fell 2.6 percent in 2009. The only other annual declines on record were in 1982 (-2.9 percent) and 1991 (-2.1 percent).

After a struggle in the first part of 2009, the Canadian economy developed strength, which resulted in positive growth for the last four months of 2009 and fourth-quarter growth of 5.0 percent annualized. With a monthly increase of 0.6 percent, January 2010 marked the fifth consecutive month in which GDP advanced. This growth was mainly backed by increases in the manufacturing sector, but more so in the mining, oil and gas sector as the appetite for Canadian raw materials remained healthy around the world and especially in China.

In the employment sector, Canada quietly recouped nearly half of the full-time positions lost during the short, but intense recession of 2008-2009. Between October 2008 and July 2009, the Canadian economy lost 483,000 full-time positions. Since then, nearly 210,000 full-time jobs have been added, including a robust figure of 60,200 jobs in February 2010 alone, which brought the unemployment rate to 8.2 percent.

Responses to the Bank of Canada’s Spring 2010 Business Outlook Survey provided further assurance that the recovery has taken hold. Survey participants expected sales growth to pick up over the next twelve months and planned to increase investment spending and employment. Investment plans have been increasingly being targeted at expansion and at improving efficiency to promote future growth, which should have a positive effect on the demand for commercial real estate. Credit conditions appear to have eased, although the majority of respondants reported that improvements have been modest and concentrated among the large firms.

A review of all of the major banks’ forecasts for GDP growth in 2010 and 2011 demonstrated modest confidence that the economy has found its momentum again. Within the first quarter of this year, more than half of the banks revised their projected growth rates upwards.

Notwithstanding the fact that the recovery started a quarter earlier in the Greater Toronto Area (GTA)

Canadian GDP Forecast (Annual Average)2008 2009 2010F 2011F

RBC 0.4 (2.6) 3.4 3.6

CIBC WM 0.4 (2.6) 2.9 2.5

Scotiabank 0.4 (2.6) 3.3 2.8

BMO 0.4 (2.6) 3.4 3.2

TD Economics 0.4 (2.6) 3.1 2.9

Bank of Canada 0.4 (2.6) 2.9 3.5

CBoC 0.4 (2.6) 3.2 3.3

Consensus 0.4 (2.6) 3.2 3.1

Note: Most recent data from April 9, 2010

compared to the rest of Canada, the economic downturn left a deeper mark in this region as a whole as the GTA economy contracted by 2.8 percent in 2009. The service-producing sector managed to expand by a marginal 0.9 percent with declines being registered in only transportation and warehousing, as well as trade and business services. Goods-producing industries experienced a decline of 13.5 percent with all three industries exhibiting significant losses, their largest since data tracking began in the late 1980s.

From a macro-economic perspective, it should be noted that the effects of the latest recession have been overshadowing a structural shift which has been going on in the GTA for the last ten years. During this time frame, the GDP of goods-producing industries fell by 13 percent and employment decreased by ten percent. In contrast, the economic output of service-producing industries’ rose by 42 percent and employment increased by 34 percent, which made it apparent that service-producing industries have outpaced their counterpart to dominate the growth in the GTA’s economy.

As can be seen in the following two charts, the growth in the service-producing industries over the last ten years came predominantly from FIRE (finance, insurance and real estate), trade, business services and non-commercial services (i.e. health and education). In the goods-producing industries, the negligible increases in other sectors were not enough to offset the considerable declines in manufacturing. With this structural shift, the demand for real estate changed as well, causing a boom in the development of logistical facilities and the creation of more efficient and user-friendly office space over the same time period.

Toronto Econom

ic Overview

Toronto Economic Overview | 4

Looking forward, all industries in the GTA are forecasted to resume economic growth in 2010 and 2011 according to the Conference Board of Canada (CBoC). CBoC revised their 2010 forecast for the GTA’s GDP growth from 3.5 percent in late 2009 to 3.7 percent in March 2010, reaffirming their confidence in the economic recovery on a GTA and national level.

Through Colliers’ statistical analysis, it has been determined that the economic output of wholesale trade, retail trade, transportation and communication, retail sales, and import levels all correlate well with industrial real estate market indicators. Given the strength of the correlations between these economic indicators and commercial real estate market performance, these indicators have been utilized in Colliers’ forecasts of GTA industrial markets.

Goods-Producing Sector Service-Producing Sector

$0.00

$10,000

$20,000

$30,000

$40,000

$50,000

$70,000

$60,000

$80,000

Mill

ions

$ 2

002

Man

ufac

turin

g

Con

stru

ctio

n

Prim

ary

& U

tiliti

es

Tran

spor

tatio

n &

War

ehou

sing

Info

rmat

ion

& C

ultu

re

Who

lesa

le &

Ret

ail T

rade

Busin

ess

Serv

ices

Pers

onal

Ser

vice

s

Non

-Com

mer

cial

Ser

vice

s

Publ

ic A

dmin

istra

ion

Fina

nce,

Insu

ranc

e &

Rea

l Est

ate

1999 2009 2014F % Increase 1999-2009 % Decrease 1999-2009

(22%) (8%)20% 20% 59% 46% 38% 29% 31% 27%51%

Economic Output of GTA Industry Sectors

Goods-Producing Sector Service-Producing Sector

0

100

200

300

400

500

600

Num

ber

of E

mpl

oyee

s (T

hous

ands

)

Man

ufac

turin

g

Con

stru

ctio

n

Prim

ary

& U

tiliti

es

Tran

spor

tatio

n &

War

ehou

sing

Info

rmat

ion

& C

ultu

re

Who

lesa

le &

Re

tail T

rade

Busin

ess

Serv

ices

Pers

onal

Ser

vice

s

Non

-Com

mer

cial

Serv

ices

Publ

ic A

dmin

istra

ion

Fina

nce,

Insu

ranc

e &

Rea

l Est

ate

1999 2009 2014F % Increase 1999-2009 % Decrease 1999-2009

(20%) 6%31% 38% 25% 28% 25% 45% 37% 19%45%

Employment Distribution Among GTA Industry Sectors

Note: As of March 2010 CBoC has revised their industry sector clustering to improve the representation of growing industry sectors. For more information, please visit: www.conferenceboard.ca | Metropolitan Directory.

Greater Toronto Area

A number of recent positive readings have brought confidence to the economic health of the industrial sector. Auto sales have surged, housing starts for March at 200,000 units grew closer to the ten-year average, the national trade surplus reached its best level in a year, manufacturing shipments were up 2.4 percent in January to the highest level since November 2008, and home and retail sales have all jumped.

However, these indicators should be taken cautiously, as strong growth rates after a steep recession similar to the most recent one are normal and even expected. To put it into a historic perspective, manufacturing GDP and shipments, after being adjusted for inflation, are sitting at 1997-1998 levels and nearly 20 percent below the pre-recession peak. Different parts of the industrial sector may be growing again, but at levels well below the pre-recession peak, leaving some catching up to do.

Arrows indicate trends observed since Winter 2010.

$4.84

5.9%

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

New Supply Average Asking Net Rent Availability Rate

Net

Ren

t $

/ Net

New

Sup

ply

(mill

ion

SF)

FORECAST

GTA Historical Performance & Forecast

Availability: 5.9% q Net Absorption: 3,409,421 SF p Asking Net Rent: $4.84/SF p Under Construction: 925,062 SF q

5 | Industrial Market Report & Forecast | Spring | 2010

Greater Toronto Area | 6

A looming question for many businesses is how the rising Canadian dollar compared to a number of historically strong currencies like the US dollar, euro, Chinese yuan or Japanese yen will impact their bottom line. It is certainly unwelcome news to export-sensitive industries, especially small- and medium-sized businesses whose products are now much more expensive on the world market. On the other hand, importing industries are obviously pleased as they can now buy more goods for the same dollar amount. Overall, as long as Canadian products remain in demand worldwide, a strong Canadian dollar will have a chance to support economic output and may even contribute to the recovery.

A recent reading of Colliers’ key industrial real estate market indicators in the GTA provides positive assurance that strength is also returning to this market. Within the first quarter of 2010, the industrial availability rate decreased from 6.3 percent to 5.9 percent, 10 basis points lower than Colliers initially forecasted in its Winter 2010 Industrial Market Report and Forecast. This marks the lowest rate recorded over the course of the last twelve months as demand for industrial space slowly regains momentum. A drop in availability of this magnitude and over such a short time period has not been observed since the recent growth years between 2005 and 2008. Average asking net rent remains below levels observed a year ago, but has increased marginally by 2.3 percent in Q1 2010 to $4.84 per square foot (SF). This concludes the trend of declining asking rents which began at the end of 2008. In addition, the construction of new industrial facilities has virtually stopped as industrial space users have either postponed their real estate decisions or have opted to utilize their current space more efficiently.

As for what lies ahead, the CBoC in its March 2010 release forecasted growth in the industrial sector to be at an annual average of 4.2 percent in the GTA for the next two years, with most of the growth expected to occur in the construction and trade sector. With this in mind, Colliers believes that the GTA industrial market is poised to experience lower levels of availability. Availability rates are expected to steadily decrease to below the five percent mark by the first half of 2011 and reach levels not observed since 2001. With less competitive space available, rent levels will respond with a moderate increase to above $5.00 per SF on average in 2011, pushing market fundamentals into more favorable territory for new development.

Greater

Toronto Area

Golden H

orseshoe Infrastructure and G

reenbelt Boundaries

This m

ap provides an overview

of major

infrastructure features, highw

ay improvem

ents and the boundaries of the greenbelt in the G

olden Horseshoe area.

The proposed greenbelt

expansion will close m

any gaps betw

een the current greenbelt and existing urban developm

ent. Green lines

indicate watersheds in the

GTA

that will be included

in the proposed greenbelt expansion.

LegendHighw

ayH

ighway Im

provement

Highw

ay Extension

Airport

Railway

Intermodal

Existing Greenbelt

Proposed Greenbelt 2.0

Built-Up A

rea

Greenbelt and Infrastructure Map

Location Analysis of

Industrial Buildings C

lassified by Clear

Height

As you m

ove further from

the centre of the city and tow

ards the edges of the G

TA, ceiling heights of

industrial buildings gradually increase. U

nderstandably, industrial buildings also tend to cluster in close proxim

ity to highways

and railways. A

n in-depth G

IS analysis reveals that 75 percent of the industrial buildings surveyed are located w

ithin one kilometre

of a rail line.

LegendIndustrial Buildings - C

lear Height

>30

Feet

28-30

Feet

26-30

Feet

24-26

Feet

22-24

Feet

20-22

Feet

18-20

Feet

16-18

Feet

14-16

Feet

12-14

Feet

<12

Feet

Highw

ay

Railway

Airport

Industrial Buildings By Clear Height

Average C

lear Height By Subm

arket

Greater

Toronto Area

9 | Industrial Market Report & Forecast | Spring | 2010

GTA Central

Arrows indicate trends observed since Winter 2010.

Availability remains at a higher level than observed twelve months ago with 4.4 percent, or approximately 11 million SF, of the existing inventory being on the market. However, compared to the end of 2009, availability has decreased by 40 basis points. This suggests that demand for industrial space has returned to this market, especially for smaller sized facilities less than 50,000 SF. Average asking net rent amounts

to $4.26 at the end of Q1 2010, which is below the average from twelve months ago, but up by almost four percent since the end of 2009. With no new supply scheduled in this market and the anticipated positive effects from the economic recovery, Colliers projects that availability rates will decline modestly to 4.1 percent within the next year and asking net rates will respond with a four to five percent increase.

$4.26

4.4%

$4.26

4.4%

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

New Supply Average Asking Net Rent Availability Rate

Net

Ren

t $

/ Net

New

Sup

ply

(mill

ion

SF)

FORECAST

GTA Central Historical Performance & Forecast

12 Month Net Absorption by SubmarketScarboroughTorontoYorkEast YorkEtobicokeNorth York

Circle represents the distribution of available space within GTA Central as of March 2010.

(1,224)

(593)

(24)

2

95

867

0 500 1,000(500)(1,000)(1,500)Absorption (thousands of SF)

Despite positive absorption during Q1 2010, the twelve month average remains negative in this market. More specifically, Etobicoke and North York remain persistently below occupancy levels observed a year ago, while East York’s overall negative absorption for the past twelve months is due to new space being recently added on to the market. Most of the market’s available space is found in Etobicoke, which quoted an above-market availability rate of 6.5 percent at the end of Q1 2010. The submarket with the least amount of space available on a per-square-foot-basis is York, the smallest central submarket with historically lower activity levels.

Availability: 4.4% q Net Absorption: 950,304 SF p Asking Net Rent: $4.26/SF p Under Construction: 0 SF tu

Greater Toronto Area | Central | 10

Average Asking Net Rent by Submarket and Clear Height Over 28’18’ to 24’ 24’ to 28’Under 18’ Average

$2.00

$2.50

$3.00

$4.00

$3.50

$4.50

$5.00

$5.50

$6.00

Ask

ing

Ren

t $

(per

SF)

East York Etobicoke North York Scarborough Toronto York GTA Central

In GTA central, asking net rents range between $3.88 per SF in East York to $4.95 per SF in York. While space in buildings with higher ceiling heights are typically marketed at a higher price,

deviations do occur, especially in a market like GTA central where the inventory is characterized by predominantly smaller building sizes, older buildings and buildings with clear heights of less than 18 feet.

Industrial Building Sales By Size Category > 150,000 SF> 50,000 SF > 50,000 - 150,000 SF

0

20

40

60

80

100

120

Num

ber

of T

rans

actio

ns

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010YTD

A closer look at which size category of buildings was traded the most over the last thirteen years in GTA Central provides an obvious result. During this time period, more and more industrial buildings smaller than 50,000 SF in size changed ownership each year. Most of the buildings in this size category traded during the growth years between 2005 and 2008. After 2007,

trades in the two larger size categories diminished due to the fact that the supply of larger facilities for sale lessened. Since the beginning of 2009, most of the industrial buildings sold in GTA Central have continued to be buildings smaller than 50,000 SF and the majority have been purchased by user-occupiers.

GTA

Central

11 | Industrial Market Report & Forecast | Spring | 2010

GTA East

Arrows indicate trends observed since Winter 2010.

The addition of 830,000 SF of available space to the GTA East market last quarter caused the availability rate to jump to 7.8 percent from 5.4 percent. This continues a trend of increasing availability observed over the past few years in this market. The size of this market is relatively small compared to other GTA markets, causing volatility and dramatic changes on a percentage-basis while changes in available space on a

per-square-foot basis can actually be considered quite common across the entire region. However, asking net rent did trend upwards and averaged out at $4.95 per SF, although this remained below levels observed a year ago.

The impact of the economic recovery on this market is expected to stabilize it over the course of the next year with availability trending downwards and asking net rents trending upwards.

GTA East Historical Performance & Forecast

12 Month Net Absorption by Submarket

(267)

(244)

(114)

(4)

AjaxOshawaWhitbyPickering

Circle represents the distribution of available space within GTA East as of March 2010.

(100) 0(200)(300)Absorption (thousands of SF)

A review of GTA East’s twelve month absorption shows that all of its submarkets indicate less occupied space than a year ago, with Pickering showing the largest decline. With over a million SF of available space, Whitby continues to report the largest amount of available space in this market.

$4.95

7.8%

$4.95

7.8%

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

0.0%

1.0%

2.0%

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6.0%

7.0%

8.0%

9.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

New Supply Average Asking Net Rent Availability Rate

Net

Ren

t $

/ Net

New

Sup

ply

(mill

ion

SF)

FORECAST

Availability: 7.8% p Net Absorption: (828,579) SF q Asking Net Rent: $4.95/SF q Under Construction: 0 SF tu

Greater Toronto Area | East | 12

Average Asking Net Rent by Submarket and Clear Height

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50

$6.00

Ajax Oshawa Pickering Whitby GTA East

Ask

ing

Ren

t $

(per

SF)

Over 28’18’ to 24’ 24’ to 28’Under 18’ Average

GTA East’s average asking net rent ranges between $4.68 per SF in Pickering to $5.06 per SF in Whitby. Most of the buildings in GTA East are characterized by a clear height between 18’ and 28’, however the majority of the current available space is within buildings

with ceilings above 28’. The effect of this bias is an increase in average asking net rent levels as available space in buildings with ceilings above 28’ is marketed at a higher asking rent than space in buildings with lesser ceiling heights across all submarkets.

Industrial Building Sales By Size Category > 150,000 SF> 50,000 SF > 50,000 - 150,000 SF

0

4

8

12

16

20

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010YTD

Num

ber

of T

rans

actio

ns

As illustrated in the above graph, smaller sized buildings were traded the most during the recent boom from 2005 to 2008, which is not surprising as over 60 percent of the inventory in GTA East falls into this size

category. Overall, this market has been characterized by low transaction volume with only 13 buildings sold since the beginning of 2009, eight of them to user-occupiers.

GTA

East

13 | Industrial Market Report & Forecast | Spring | 2010

GTA North

Arrows indicate trends observed since Winter 2010.

Since mid-2009, availability in GTA North has continuously decreased to levels not seen since the beginning of 2008. At the end of Q1 2010, the availability rate was 5.5 percent, translating to approximately 6.9 million square feet available for lease and/or sublease. Strength has clearly returned to this market as more space has been leased in relation to the amount of available space that has been put on to the market. Average asking net rent fell further to $5.16 per SF as landlords aligned themselves with

new market price expectations, creating more attractive opportunities for users looking for space. In comparison with the other GTA industrial markets, the GTA North average market rent level remained the highest.

Fuelled by returning economic growth, demand for industrial space in GTA North is expected to further increase over the next year, causing availability to continue to decline and pushing average asking net rent to higher levels.

GTA North Historical Performance & Forecast

12 Month Net Absorption by Submarket

(149)

(15)

83

2,788

VaughanMarkhamNewmarketRichmond HillWhitchurch-StouffvilleAurora

38

310

Circle represents the distribution of available space within GTA North as of March 2010.

0 2,000(1000)Absorption (thousands of SF)

Over the course of the last twelve months, the GTA North submarkets combined were the largest contributor to overall absorption in the GTA. This growth was primarily driven by strong positive absorption in Vaughan of approximately 2.8 million SF. Only two of the smaller submarkets, namely Aurora and Whitchurch-Stouffville, recorded negative absorption.

$5.16

5.5%

$5.16

5.5%

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

New Supply Average Asking Net Rent Availability Rate

Net

Ren

t $

/ Net

New

Sup

ply

(mill

ion

SF)

FORECAST

Availability: 5.5% q Net Absorption: 1,650,367 SFp Asking Net Rent: $5.16/SF q Under Construction: 262,759 SF tu

Greater Toronto Area | North | 14

Average Asking Net Rent by Submarket and Clear Height

$4.00

$4.50

$5.00

$5.50

$6.50

$6.00

Aurora Markham Newmarket Richmond Hill Vaughan GTA NorthWhitchurch-Stouffville

Ask

ing

Ren

t $

(per

SF)

Over 28’18’ to 24’ 24’ to 28’Under 18’ Average

GTA North’s average asking net rents at the end of Q1 2010 ranged between $4.23 per SF in Aurora to $6.00 per SF in Whitchurch-Stouffville. Markham and Vaughan quoted higher rents for industrial

buildings with ceiling heights above 24’, while in other submarkets there was insufficient information as not all clear height categories had space on the market.

Industrial Building Sales By Size Category > 150,000 SF> 50,000 SF > 50,000 - 150,000 SF

0

40

80

120

160

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010YTD

Num

ber

of T

rans

actio

ns

Since 2001, most of the industrial buildings changing ownership in GTA North have been in the smaller building size category of less than 50,000 SF in size. As observed in other GTA markets, the amount of smaller sized buildings being sold increased steadily

over time and peaked during the growth period from 2005 to 2008. Over the last year, private Canadian investors were the most dominant purchaser group by a small margin, followed by user-occupiers.

GTA

North

15 | Industrial Market Report & Forecast | Spring | 2010

GTA West

Arrows indicate trends observed since Winter 2010.

As projected in Colliers’ Winter 2010 Industrial Market Report and Forecast, availability in this market decreased in Q1 2010 from 7.5 percent to 7.1 percent, the second continuous quarter of decline in Q3 2009. However, availability remained above pre-recession levels with more than 21 million SF being marketed. Average

asking net rent responded with an increase of almost three percent to $5.02 per SF.

With only minimal new supply, availability is expected to decline further over the next year to healthier levels of close to five percent, while rents are expected to trend further upwards.

$5.02

7.1%

$5.02

7.1%

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

New Supply Average Asking Net Rent Availability Rate

Net

Ren

t $

/ Net

New

Sup

ply

(mill

ion

SF)

FORECAST

GTA West Historical Performance & Forecast

12 Month Net Absorption by Submarket

(1,175)

(481)

(163)

(144)

460

4,138MississaugaMiltonOakvilleCaledonBurlingtonBrampton

Circle represents the distribution of available space within GTA West as of March 2010.

0 6,0002,000 4,000(2,000)Absorption (thousands of SF)

With the recent upswing in the markets, Q1 2010 posted a significant amount of positive absorption, causing the twelve month average absorption to be the highest since Fall 2008. Upon a more detailed analysis on a submarket level, it becomes apparent that Mississauga and Milton are leading the remaining submarkets into overall positive territory. Some of GTA West submarkets that are further away from the centre are currently reporting the highest availability rates in the entire GTA, namely Caledon, Burlington, Milton and Brampton.

Availability: 7.1% q Net Absorption: 3,409,421 SFp Asking Net Rent: $5.02/SF p Under Construction: 450,577 SF q

Greater Toronto Area | West | 16

Average Asking Net Rent by Submarket and Clear Height

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50

$6.00

$6.50

Brampton Burlington Caledon Milton Mississauga Oakville GTA West

Ask

ing

Ren

t $

(per

SF)

Over 28’18’ to 24’ 24’ to 28’Under 18’ Average

GTA West’s average asking net rents range between $4.65 per SF in Brampton to $5.18 per SF in Burlington. Buildings with

a higher ceiling height tend to charge a premium compared to buildings with lower ceiling heights in all GTA West submarkets.

Industrial Building Sales By Size Category > 150,000 SF> 50,000 SF > 50,000 - 150,000 SF

0

20

40

60

80

100

120

140

160

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010YTD

Num

ber

of T

rans

actio

ns

Similar to all other industrial markets, the building size category with the most ownership changes over the last thirteen years in GTA West have been buildings below 50,000 SF. While this building size category actually experienced an increase in trades during the last boom, the number of

sales of the other two building size categories above 50,000 SF stayed fairly steady the entire time. For the past fifteen months, the majority of buildings were purchased by user-occupiers, with most of those being in the 50,000 SF or less size category.

GTA

West

17 | Industrial Market Report & Forecast | Spring | 2010

Glossary of Terms

Asking Net Rent InventoryThe dollar amount requested by landlords for direct available space, not including subleases, expressed in dollars per square foot per year.

Industrial inventory consists of existing industrial buildings which are 15,000 square feet and larger.

Availability Net AbsorptionThe amount of available space divided by the building’s inventory base. Available space is space that is available for lease, and may or may not be vacant.

The net change in physically occupied space between the current measurement period, and the last measurement period. It can be either positive or negative.

Industrial Building VacancyFacilities in which the space is used primarily for research, development, service, production, storage or distribution of goods, and which may also include some office space. Industrial buildings are further divided into three primary classifications: manufacturing, warehouse and flex space.

The amount of vacant space divided by the building inventory base. Vacant space is physically unoccupied, and it may or may not be available for lease or sublease. This is physical vacancy. It is not determined whether a tenant is paying rent on the space.

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