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News release


Slower Start to 2014 Not an Indication of Apathy by Industrial Investors for GTA Product

Overall transaction volumes are down year-over-year from H1 2013, but JLL report sees ‘healthy outlook’

Toronto, November 10, 2014 – Even though the Greater Toronto Area has seen more industrial portfolio transactions than the first half of 2013 and a similar amount of single assets transact, the market has experienced a considerable decline in sales volumes. The $627 million of transactions is down 19 percent from the second half of 2013 and 43 percent from the H1 2013, according to JLL research.

The change is due in large part to smaller deal sizes being brought to the market in the first six months of the year – with average portfolio valuations down 53 percent to $43 million from $81 million.

"Although 2014 has been lagging so far, we are optimistic about the remainder of the year," said Fraser Plant, Senior Vice President of Industrial and Logistics in JLL's Mississauga office. "For the right assets, there will be healthy competition. The investor community continues to grow with new participants from both the public and private sectors. More importantly, fundamentals, specifically the cost of capital, remain very attractive for those looking to acquire.

JLL's GTA Industrial Investment Report predicts a healthy outlook for the Toronto industrial leasing market with stable rent growth, historically low availability rate and a disciplined approach to bringing new product to the market.

In the first half of the year, the average cap rate of industrial investment sales climbed to 6.8 percent, up 50bps from the record-setting low of 6.3 percent in 2013. According to the report, this year-over-year increase in cap rate can be attributed to the limited offerings of Class-A assets so far in 2014.  

 "Class A buildings are very highly coveted and assets greater than 100,000 square feet being offered remain scarce," said Plant. "Investors recognize the difficulty in replacing long term stable income, however, Vendors will find certain assets within their portfolios for disposition to take advantage of the strong buy side fundamentals. "

Investment activity thus far was comprised of primarily Class B to Class A- assets. Therefore, the increasing average yield is not an indication of declining valuation or softening demand, but rather the type of assets being traded.

JLL is Canada's fastest growing commercial real estate firm. JLL has two offices in Toronto, with the headquarters located downtown. The firm also operates in, Mississauga, Montreal, Ottawa, Vancouver, Calgary and Edmonton. JLL manages more than 50 million square feet of facilities across Canada. The firm offers tenant and landlord representation, project and development services, investment sales, advisory and appraisal services, debt capital markets and integrated facilities management services to owners and tenants in Canada.

About JLL

JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4 billion, JLL has more than 200 corporate offices and operates in 75 countries worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3 billion square feet and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $48.0 billion of real estate assets under management. JLL is the brand name of Jones Lang LaSalle Incorporated. For further information, visit