FIGURES|WATERLOOREGIONINDUSTRIAL|Q42025CBRE

Supplypipelinetightenswhiledemandrebounds

acrosskeymarkets

A7.5%

AvailabilityRate

Note:Arrowsindicatechangefrompreviousquarter.

826K

SFNewSupply

1.4M

SFUnderConstruction

$12.56

PSFAvg.AskingLeaseRate

A

$262.63

PSFAvg.AskingSalePrice

Overview

-Underconstructionspacehasdeclinedtojustabove1.4millionsq.ft.,markingthelowestlevelsinceQ42021.Thisrepresentsasignificantdropof865,000sq.ft.comparedtoQ42024,highlightinganotableslowdownindevelopmentactivity.

-Theyearbeganwithnonewsupplydeliveredtothemarket;however,byyear-end,new

supplyreachedapproximately1.2millionsq.ft.,withthemajorityofthisspacedeliveredinthefinalquarter.

-Afterrecordingthelowestnetabsorptioninovertwodecades,theyearcloseswith718,000sq.ft.ofpositiveabsorption,drivenlargelybytheWaterlooRegionat682,000sq.ft.Most

marketspostedgains,whileGuelphandStratfordendedwithnegativeabsorptionof219,000sq.ft.and16,000sq.ft.,respectively.

-Netaskingrentsremaincompetitive,averagingapproximately$12.56persq.ft.,whichpositionsthemarketasanaffordablealternativetohigher-costregions.

FIGURE1:MidwesternOntarioIndustrialSupply&DemandFundamentals

NetAbsorptionandNewSupply(MSF)AvailabilityRate(%)

4.0

3.0

2.0

1.0

0.0

-1.0

-2.0

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

20212022202320242025

NetAbsorptionNewSupplyAvailabilityRate

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

Source:CBREResearch,Q42025.

1CBRERESEARCH?2026CBRELimited

FIGURES|WATERLOOREGIONINDUSTRIAL|Q42025

2CBRERESEARCH?2026CBRELimited

Netabsorptionandnewsupply

Theindustrialmarketexperiencedsignificantshiftsinbothsupplyanddemanddynamics

throughouttheyear,markingaperiodoftransitionforthesector.Onthesupplyside,theyearbeganwithnonewdeliveries;however,completionsacceleratedinthelatterhalf,adding1.2

millionsq.ft.ofnewinventorybyyear-end.Cambridgestoodoutastheonlymarkettoseenewsupplythisquarter,with826,000sq.ft.ofconstructioncompletedledby315AllendaleRoad,whichaccountedforover244,000sq.ft.Thesecompletionscontributedtooverallinventory

growth,evenasthedevelopmentpipelinetightenedconsiderably.

Afterrecordingthelowestnetabsorptioninovertwodecadesearlierintheyear,themarket

reboundedtoclosewith718,000sq.ft.ofpositiveabsorption.ThisrecoverywasdrivenlargelybyWaterlooRegion’sstrongperformance,whichaccountedfor682,000sq.ft.ofthetotal.Mostmarketspostedgains,underscoringtenantactivity,thoughGuelphandStratfordendedwith

negativeabsorptionof219,000sq.ft.and16,000sq.ft.,respectively.Thesemixedresultshighlighttheunevennatureofdemandacrosstheregion,withWaterlooemergingasakeygrowthdriverwhileothermarketscontinuetofacechallenges.

Underconstructiondeclinewhilenetrentalratestrenddownwards

Underconstructionspacedeclinedsharplytojust1.4millionsq.ft.,markingthelowestlevelsinceQ42021andadropof865,000sq.ft.comparedtoQ42024.Thisreductionsignalsa

notableslowdownindevelopmentactivity,likelydrivenbycautiousdevelopersentimentamidshiftingdemandpatterns.

Netaskingrentsinthemarketremaincompetitive,averagingapproximately$12.56persq.ft.

Therangespansfrom$10.40to$13.31persq.ft.,adifferenceofabout$1.46persq.ft.,reflectingstablepricingwithslightvariationbasedonlocationandbuildingquality.Premiumassets

commandrentsnear$14.00persq.ft.,whileolderorlessstrategicallylocatedpropertiestrendcloserto$12.50persq.ft.

2.0

1.5

1.0

0.5

0.0

-0.5-1.0

-1.5

FIGURE2:HistoricalNetAbsorption(MSF)

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

2021

2022

2023

2024

2025

Source:CBREResearch,Q42025.

FIGURE3:UnderConstructionandNewSupply(MSF)

6.0

5.0

4.0

3.0

2.0

1.0

0.0

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

202020212022202320242025

UnderConstructionNewSupplySource:CBREResearch,Q42025.

FIGURES|WATERLOOREGIONINDUSTRIAL|Q42025

FIGURE4:IndustrialMarketStatisticsSummary

Quarterly

Net

Absorption

(SF)

Avg.AskingSalePrice

(PSF)

YearlyNet

Absorption

YTD(SF)

Under

Construction

(SF)

Inventory(SF)Ab(iyn(y)

NetAskingRent(PSF)

Submarket

Kitchener24,243,5598.7%4.6%28,080-509,285240,000$12.69$338.61

Waterloo

8,711,405

8.7%

2.2%

92,530

48,168

0

$11.96

$222.60

Cambridge

37,231,153

9.2%

6.6%

560,943

-317,137

179,349

$12.61

$317.14

Waterloo

RegionTotal

70,186,117

8.9%

5.4%

681,553

-778,254

419,349

$12.57

$312.82

Guelph

22,392,020

6.4%

4.0%

-219,427

-181,796

0

$13.31

$274.36

Brantford

24,744,854

5.5%

1.9%

271,226

573,568

1,011,986

$11.77

$145.40

Stratford

7,104,191

3.0%

1.4%

-15,613

-213,575

0

$10.41

$138.17

OverallTotal

124,427,182

7.5%

4.2%

717,739

-600,057

1,431,335

$12.56

$262.63

Source:CBREResearch,Q42025.

MarketAreaOverview

Contacts

MeganSolomon

ResearchAnalyst

/p>

megan.solomon@

CBREOffice

Kitchener

72VictoriaStreetSouth,Suite200

Kitchener,ONN2G4Y9

we

all

?Copyright2026.Allrightsreserved.Disclaimer:Informationcontainedherein,includingprojections,hasbeenobtainedfromsourcesbelievedtobereliable.Whileresponsibilitytoco