Midwestern Ontario had a slow start to the year as availability increased 60 bps to 2.5%. The market recorded 704,641 sq. ft. of negative net absorption, which can be attributed to 724,641 sq. ft. of space that came onto market in Q1 2020. The majority of this space was from the City of Kitchener, which added 288,683 sq. ft. over the quarter.
20,000 sq. ft. of new supply was delivered in the Guelph submarket. An additional 386,919 sq. ft. of space will be coming to the market in Q2 with the completion of 45 and 55 Quarterman Road. 45 Quarterman Road is currently 75% pre-leased and emphasizes the need for new industrial space in the area.
Waterloo Region currently has 1.1 million sq. ft. under construction, with 406,479 sq. ft. already pre-leased. All projects under construction are expected to be completed by year-end.
Following seven quarters of steady growth, Waterloo Region’s average net lease rate fell from a market high to $6.03 per sq. ft. Rates decreased in every city this quarter by a maximum of $0.42 per sq. ft., except for Brantford which faced a drop of $1.75 per sq. ft.