London Progress
Commercial Real Estate Market Making Gains.
London is a lovely community nestled in the heart of Southwestern Ontario and while recent economic downturns has slowed its once robust growth, local leaders in the commercial real estate sector suggest London is a community eager for inventive investors. The London Ontario Market Overview provided by CBRE Limited suggests that “London shows promise to continue with economic recovery in 2014.”
In the Commercial Real Estate Sector, 2013 brought 354,121 square feet of new supply to the Industrial Market, an additional 78,751 square feet of space is currently under construction, and continued growth is expected in 2014. London’s industrial availability rate decreased 140 basis points in Q4 2013 to 12.8 per cent from 14.2 per cent in Q3 2013. The London office market vacancy rate increased in Q4 2013 to 15.4 per cent, up 70 basis points (bps) from Q3 2013 primarily in the city core while the Suburban Market saw a decrease of 2,388 square feet of vacant space. Retail vacancy in London in Q4 2013 was 6.8 per cent, decreasing 10 basis points from Q3 2013. The London Malls vacancy rate decreased 50 basis points to 6.5 per cent in Q4 2013.
J. Peter Whatmore, Senior Vice President Southwestern Ontario at CBRE Limited, suggests “London has had some challenges over the past number of years so we’re pleased to have a positive story.” For Whatmore and his peers, as well as investors, this spells opportunity. “We had a wonderful run last year with investment properties and our office very involved in this area,” he says, while noting that “The 401 Highway corridor has become a big initiative in the city. The province is on board and it will open up a lot of new industrial lands.”“ We have some of the most reasonably priced industrial land in comparison to other communities along the 401 corridor,” Whatmore adds. “London is still extremely well-positioned in agriculture as its heartland and this will continue because of access to product and international markets.” Richard Gleed, Broker of Record/President at GLEED Inc., Real Estate Brokerage agrees.
“London, for the commercial market, is extremely exciting right now. We have the talent pool, resources, infrastructure, and available labour to make things happen,” says Gleed. “Right now, most of our older plants have been sold and are getting repurposed. The City is pushing hard for affordable industrial lands along the 401 Highway Corridor. We have everything to accommodate businesses with new ideas, be it the food sector, research and development or information technology. We’re not making wagon wheels and cigar boxes anymore.”
London has everything industry and investors are looking for, ideally located between three major border crossings at the junction of Highway 401, 402 and 403. London boasts a desirable quality of life – minimal commutes, affordable housing, excellent education and health care facilities and an abundance of recreational and cultural facilities. London is home to 15 major trucking firms and two national rail carriers. London International Airport offers 24-hour operation, is a designated Export Distribution Centre (EDC), allowing goods to be brought into Canada without the prepayment of duties or taxes if the goods are re-exported. As well, there are no development charges for industrial development in the City of London and the London Economic Development Corporation (LEDC), at no cost, will provide assistance to help identify and apply for the government incentive programs that your company may qualify for.
“CEO’s want to move their businesses to quality communities with a strong cultural sector and a great quality of life,” says Gleed. “We have a number of investors looking at London and with our Capitalization Rate between 7 and 8 percent we have a lineup of investors. London provides better value with quality rental clients.”
To discuss London’s commercial real estate investment opportunities visit CBRE Limited at cbre.com, or GLEED Inc. at gleedcommercial.com, or the London Economic Development Corporation at ledc.com.
