Prologis has become a major player since reaching north from its U.S. base and entering the Greater Toronto Area (GTA) industrial real estate market 20 years ago. Its growth in Canada continues, with millions of square feet in its development pipeline.
“We’ve always been growing via development and haven’t been one that just stood in line and lined up to buy existing buildings,” Prologis vice-president and country manager Bill Bolender told RENX.
Prologis has an approximately 11-million-square-foot portfolio in the GTA. There’s another six million square feet in its development pipeline, with about 2.5 million of that now under construction across six buildings.
Internationally, the San Francisco-based firm owns or has investments in logistics properties and development projects expected to total approximately 1.2 billion square feet, spread across 19 countries. It leases facilities to approximately 6,700 global customers.
GTA properties under development
That number will be growing soon as more GTA developments reach completion.
Ground was recently broken on Prologis’ first project in Halton Hills at 8111-8119 Trafalgar Rd., on the north side of Steeles Avenue across the street from the Toronto Premium Outlets mall. Three buildings totalling around 1.3 million square feet are planned.
The first two speculative facilities are underway and expected to be completed in early 2025:
- one at 474,945 square feet with a 42-foot clear height, two grade-level doors and 66 dock-high doors;
- and the other at 496,192 square feet with a 42-foot clear height, two grade-level doors and 68 dock-high doors.
Prologis is speculatively developing two identical 158,610-square-foot distribution centres at 450 Evans Ave., just south of the Gardiner Expressway, in Etobicoke. They’re scheduled to be completed this year and will offer 36-foot clear heights, two grade-level doors, 20 dock-high doors and 2,475 square feet of office space.
Prologis broke ground 14 months ago on a distribution centre of just under a million square feet for Lululemon at 5525 Countryside Dr. near Highway 50 in Brampton that’s scheduled for completion this fall. The facility is expected to employ 1,500 people.
Prologis’ first mass timber structure
Another facility in that same Brampton business park, which will total three buildings, will be an approximately 250,000-square-foot mass timber structure.
“It’s the first of its kind in North America from the perspective of being a large-scale speculative industrial building for lease, and the first in the Prologis network,” Bolender said. “Given that everybody’s focused now on ESG (environmental, social and governance) and carbon reduction – us as well – we’re pretty excited about how it’s going to do in the market.”
The first timber column went up on July 17 and completion is expected early in 2025.
Also just north of Toronto, Prologis acquired 198 acres of land at 12519 and 12713 Humber Station Rd. in Caledon from Solmar Development Corp. for almost $500 million two years ago.
The property offers easy access to Hwy. 50 and the northern terminus of Hwy. 427. Hwy. 400 is a few kilometres to the east and the route for the planned Hwy. 413 is beside the site.
It had been earmarked as future industrial land and is now going through the entitlement process. Site plan applications have been submitted and a public meeting has been held.
“That’s seeing lots of interest, specifically from large million-square-foot-plus users,” Bolender noted. “We had a good idea of what size of blocks we were going to be able to have in that park and there’s a very limited number of sites out there that can deliver those sizes of buildings.”
Bolender is hopeful that mass grading of the site can begin within 12 months. He envisions it including four to six buildings ranging in size from a low of 250,000 square feet to more than a million square feet.
Still bullish on GTA industrial market
Bolender is working with Toronto-based vice-president and investment officer Bill Bates to uncover more GTA land acquisition opportunities.
“We love to aggregate parks and buildings in an area,” Bolender said. “For example in Milton, we have eight buildings ranging from 100,000 square feet up to half-a-million square feet.
“What it allows us to do is move customers around when their businesses grow or when they contract, or when they come and go from the market. It helps you keep your customers.”
The GTA’s growing population should mean continued increases in demand for products that go through industrial and logistics facilities. Thus, Bolender has faith in the market despite the increase in vacancy rates and decrease in rents since early 2023 due to a correction of what was an overheated market.
“Some of our competitors found it tougher to get financing and tougher to move speculative projects forward, so it’s been good for us from that perspective,” Bolender noted. “We’re confident in the Toronto market and it’s one we’re actively trying to grow profitably.”
Examining other cities
Prologis is looking for acquisition opportunities in Montreal and Vancouver to expand its Canadian footprint outside the GTA.
“We’ve always liked markets that are land-constrained and tough to get into, and definitely both of those are,” Bolender said. “The brokerages know that we’re looking for the right opportunity. So whether that’s a portfolio or a company or some large development sites, we’re just looking for the right one.”
Properties with existing buildings would likely need to have additional development potential to interest Prologis, Bolender added.