Q3 2025 ICI Land Report
ICI Land Market
The ICI land market in Q3 2025 remained resilient despite moderating activity levels. After a strong start to the year, transaction volumes cooled slightly, largely due to financing challenges and economic impacts on investor sentiment. Still, pricing and lease rates showed modest deterioration across most submarkets, reflecting underlying long-term fundamentals. Demand continues to outpace new supply in key logistics corridors, supporting rental stability and cautious optimism heading into year-end.
Industrial building sales demonstrated a similar pattern of selective investment. Purchasers focused on quality assets with strong covenants and modern specifications, while older product saw limited movement. Institutional capital has stayed active, albeit highly disciplined, prioritizing assets with resilient tenant profiles and long-term income potential.
Industrial lease rates held steady quarter-over-quarter despite softer sales volume. Developers continue to pursue well-located parcels, particularly near highway interchanges and major distribution hubs. The Greater Toronto Area (GTA) and Greater Golden Horseshoe (GGH) both showed stable asking rates.
Vacancy rates have edged up marginally as newly delivered buildings entered the market. However, absorption remained positive, proof that user demand remains solid even in a higher-cost environment.
Land and asset acquisitions remain selective. Both developers and investors are focusing on risk-adjusted returns and recession-resistant user types (logistics, food, e-commerce). Larger, quality big-box product in top GTA nodes continues to outperform other segments.
We believe we will see an up take on industrial land acquisitions, starting in Q3-Q4 2026, due to the policy shift by the province including the new Special Economic Zone Act, 1. Ring of Fire Special Economic Zone and other major policies as well as major incentives for Ontario made, Protecting Ontario Account ($5 billion direct support) for strategic sectors (manufacturing, logistics, automotive) targeted to preserve jobs and accelerate large-scale projects, The Ontario Made Manufacturing Investment Tax Credit (OMMITC).
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