For a Canadian business looking to expand its inventory, the demand for warehousing space is increasing rapidly. If you are considering a small warehouse in Toronto, here are some important factors to consider. The price of warehousing space in Toronto can vary widely depending on the type of space you choose, and the area you live in. A warehouse in the Greater Toronto Area is likely to be in high demand, especially in the city’s suburbs.
Demand for warehousing space in Canada
With a boom in e-commerce, it’s becoming increasingly difficult to find affordable space for warehouses. This is driving companies to build larger warehouses and fulfilment centres to handle the growing volume of online shopping. According to a report by brokerage firm CBRE, the industrial market in Canada will grow by more than 40 million square feet over the next five years, outpacing the available leasable space.
The rise of e-commerce has caused many industries to rush to acquire small warehouse space in large Canadian cities. Retail spending in these cities is expected to grow by 70.5% by 2020, according to Group M. This growth is in part due to stay-at-home orders and social distancing measures that have resulted in the rise of online shopping. Increasing population density is also driving the need for more industrial space.
Despite the high demand for industrial space, vacancies in Canadian cities rose by nearly one fifth, according to a recent Avison Young report. The vacancy rate in Canada has jumped to 15.7%, the highest level since 1994, and is far higher than the levels observed during the dot-com bubble and the global financial crisis. If the current trend continues, the availability of small warehouse space in Canada could soon fall by one-third or more.
Cost of renting a warehouse space
The cost of renting a small warehouse space in Canada is calculated by multiplying the square footage by the base rental rate and the estimated operating costs. Many landlords also include the costs of electricity and water, which can add up to around $2 a square foot per year. Although the cost of leasing a warehouse space varies from location to location, most warehouses in Canada offer ample interior space for businesses of all sizes.
The market for industrial property in Canada is becoming increasingly hot, with demand expected to continue growing into 2022 and supply tightening as inventory drops. As a result, rents are expected to increase and availability rates will decline even further. For instance, the average net asking rent for a small warehouse in Toronto and Ottawa ended the year at 1.8%, the lowest levels in 10 years. Meanwhile, the availability rate in Calgary was 0.6%, the lowest in the country, in Q4 2021.
While the cost of renting a small warehouse space in Canada can be high, there are some benefits to renting a space in a large warehouse. Warehouses do not require a lot of utilities, including air conditioning, heating, and water. The warehouses are often equipped to meet the needs of their customers, and the space can be accessed 24 hours a day. With so many benefits, renting a space in a large warehouse can actually save you a lot of money in the long run.
Location of a warehouse in Toronto
A small warehouse in Toronto has many advantages. Not only is the city home to over 2.8 million people, it is also close to major U.S. cities like Detroit. Shipping to these cities is cost effective and reduces the amount of inbound freight, tariffs, and other fees that must be paid when shipping products. In addition, a small warehouse in Toronto can be used as a distribution center. However, it is important to consider some factors before choosing a location.
First of all, you need to think about security. You must be sure that the area is well-protected from thieves. The warehouse should also have adequate security. A good security system is essential when securing a warehouse in Toronto. It is best to check whether the area has an excellent public transportation system. This way, you can avoid the hassle of dealing with inconvenient traffic. Furthermore, you can save time, money, and energy by finding a warehouse in a convenient location.
If you’re looking for a small warehouse in Toronto, consider ProPack. Their warehouses are climate-controlled and offer complete third-party logistics services for pharmaceuticals, medical, and beauty products. Their facilities are licensed by Health Canada and feature real-time inventory tracking. In addition to its warehouse space, Shandex Logistics also offers cross docking, kitting and assembly services, and bulk climate-controlled shipping.