Mississauga is about to see major new commercial real estate projects this year – centred on big grocers and retailers – including an increased focus on amenities like transit and green office environments.
In a 2013 forecast Thursday for office, retail and industrial properties, commercial real estate broker Avison Young said such growth will come from well-known companies.
For large office developments in Mississauga, grocery store operator Sobeys has done a new deal estimated to be 200,000 square feet on the Creekback land at the Airport Corporate Centre on Tahoe Boulevard.
“It’s a brand-new design-build that will be built by Metrus [Properties],” Avison Young managing director and principal Martin Dockrill told YourMisssissaugaBiz.com.
Another major Mississauga office project is from Winners, with industrial property management company Orlando, located at Hwy 10 and the 401.
“They completed the deal near the end of 2012 for a new building, new design build,” Dockrill said. “It’s two buildings linked together totaling 300,000 square feet at 60 Standish Court.”
Dockrill explained that office vacancy rates are expected to rise in the GTA, and specifically in Mississauga and Oakville, due to significant new development. “As a result, you’ve had some tenants that will be moving from second-generation office space into new office buildings and they’ll be leaving behind some office space,” he said.
Two examples of this transition are Golder Associates, which will be vacating a few buildings in the Meadowvale marketplace, (6700 Century) and moving to their new building built by First Gulf (6925 Century Ave), which was completed at the end of last year. The other example is the building that’s currently occupied by Intact Insurance at the Manulife Corporate Centre. The insurance company will be moving to the remainder of 6925 Century.
Dockrill said areas like the Airport Corporate Centre and a lot of the suburban markets are also influenced by what’s going on in the United States. “There’s a lot of companies that are headquartered in the U.S. that have office locations in the GTA West,” he said. “The economy has suffered, leading to a downsizing in those companies. But we expect over the 12-24 months to see some recovery there.”
When it comes to the industrial market, Dockrill said there’s been very little speculative or new construction in the market for quite some time, which has kept the vacancy rate low at 5.7 per cent.
“We’re only now starting to see some speculative construction in certain areas of the city.”
Avison Young senior research analyst Anthony Hong said large-block speculative development with the industrial product that is 250,00 square feet or more and has a minimum of 24 feet clear height are in high demand, especially in the GTA West area.
“We forecast that it’s going to get absorbed very quickly in 2013,” he said. “So that’s why you’re going to vacancy rates similar to what they are right now.”
As for the future, Dockrill said more companies and tenants are concerned about transit, amenities and sustainability through LEED certification, the highest level of green building practices.
“Second generation buildings will still be able to compete provided they’re in locations that can provide access to transit and amenities,” he said, noting the Bus Rapid Transit that’s under construction and the proximity to amenities like retail shopping. “Those things are going to be very important to tenants and assist landlords in leasing space.”