Firm pays $36M for London industrial property, praises city's 'fundamentals'
Naming London one of the best cities in Canada for industrial real estate, a Toronto investment firm has snapped up another building in a $36-million deal.
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Naming London one of the best cities in Canada for industrial real estate, a Toronto investment firm has snapped up another local building in a $36-million deal.
Nexus Industrial REIT now has 13 properties in London and one in St. Thomas, bringing its area land holdings to 260,000 square metres (2.8-million square feet) after the most recent buy – a 24,500-square-metre industrial building at 15745 Robins Hill Rd., near London International Airport.
“We love the London market,” chief executive Kelly Hanczyk said. “We’re one of the largest industrial landlords in the city. London has some of the best fundamentals in Canada.”
But the real estate investment trust (REIT) isn’t done yet. It’s putting an addition on one of its local buildings and plans on adding two more industrial spaces.
London’s location between Windsor, Hamilton and the Toronto area and its strong “logistics” network for shipping and transportation, which supports parts movement and other goods, all make it desirable, Hanczyk said. “We’re very bullish on the London market. The vacancy and availability are among the lowest in Canada. It’s a growing market.”
A REIT is defined as a company that owns and often operates income-producing real estate.
Nexus also is adding 9,000-square-metres to its buildings at 1285 Hubrey Rd. near the Highbury Avenue-Hwy. 401 interchange. It’s an expansion for which there are already three interested tenants, Hanczyk said. They’re looking to add two more buildings to the local industrial scene, which would see it build 600,000 sq. ft. in total between all three projects.
That level of interest doesn’t surprise Sean Ford, owner of Dancor, the industrial builder. He is building 56,000 sq. m of industrial space on Scanlan Street (along Veterans Memorial Parkway), 3,700 sq. m on Oxford Street and an additional 18,500 sq. m of space at various sites across the city.
“It’s a fantastic vote of confidence. We would not have gotten it 10 years ago,” he said of the Nexus buy. “We have fantastic businesses from all over the world. We’re getting calls.”
Nexus’s interest in the industrial scene here long preceded news Volkswagen is building a new electric vehicle battery manufacturing plant in St. Thomas, opening in 2027.
But Ford sees London adding 93,000 sq. m of new industry locating here as a direct result of the VW investment. “I have always been bullish on London.”
CBRE, the commercial realty firm, in a report on the first quarter of this year put the availability for industrial space at 0.6 per cent, with 22,000 sq. m leased in the first three months.
There is 3.9 million sq. m of industrial space in the city. CBRE also reported there were 80,000 sq. m of space under construction at that time.
“Availability remains tight, as new supply was light this quarter,” the report stated, “mostly consisting of additions to existing buildings.”
It also pointed to businesses building their own industrial space due to a lack of available vacant space, such as the 52,000 sq. m Old Navy warehouse on Gore Road, and a 4,600 sq. m facility for Italian pasta maker Andriani in Innovation Park.
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