The push to acquire prime industrial properties in and around Toronto continues. Fiera Real Estate is the latest to add to its holdings, acquiring five industrial buildings comprising about 940,000 square feet of space in Brantford, just west of the Greater Toronto Area.
Two Fiera funds invested about $118 million in the acquisitions.
“We’re happy to get a transaction of this scale, particularly on the industrial side,” Fiera’s William Secnik told RENX in an interview. “As you can imagine, it’s been a very hot commodity especially these days.”
The buildings range in size from about 12,000 square feet to a newly constructed 530,000-square-foot, one-tenant distribution property. All were purchased from Brantford developer and property manager Vicano Construction.
“We’re obviously interested in almost any industrial in the GTA or peripheral, basically anything within a 100-kilometre radius of Toronto, so this fits the bill,” said Secnik, who is Fiera’s senior vice-president and manager of its Fiera Real Estate Core Fund.
“It certainly had the characteristics of newer-quality, great proximity, good access to labour, growing residential base and we felt there is a lot of spillover effect that would be positive in terms of the growth of rents in this market.”
The Fiera Real Estate acquisitions
The Fiera Real Estate Core Fund acquired properties at 15 Kraemers Way, 10 Abbott Court and 333 Henry St., comprising about 910,000 square feet. The Fiera Real Estate Industrial Fund acquired the other two assets, smaller properties totalling about 30,000 square feet at 60 Bury and 36 Cornell Sts.
In addition to the industrial acquisitions, the Core fund has also just closed on the purchase of a multifamily mid-rise property at 62 Park St., in Mississauga.
The industrial properties are located in two existing industrial nodes at the east and west ends of the city, with easy access to the nearby Hwy. 403. They sit on a total of about 55 acres of land and are fully tenanted.
Secnik said there is a diverse mix of occupiers in the properties acquired by the Core fund, most focused on warehousing, supply chain management and third-party logistics. He also said there is a mix of local firms and larger companies operating regional distribution and service networks.
“I’d say there is a mix of international and local tenants here, servicing the immediate area initially, but obviously changing as Toronto gets more expensive,” he explained. “This market is kind of renowned for the food and beverage focus, retail and wholesale, a bit of automotive and agricultural industry exposure, so this portfolio would reflect that historical bent.”
Core fund remains an active investor
Secnik, who has been with Fiera for five years and took on management of the Core fund early in 2020, said it remains a very active investor.
“The fund has been doing roughly $300 to $500 million in transactions each year, so we’ve been quite active. That continues on,” he said. “We’ve always been pretty focused on a heavier weight toward industrial from the get-go, so this is a reflection of this. (It’s) a diverse fund, but heavier weighted toward industrial.”
On the industrial side, Secnik said the major markets of Toronto, Vancouver, Montreal and Ottawa are key focuses right now, though “we’ll look at good opportunities and good markets.”
While the Core fund is focused on acquiring existing assets, it is also involved in some development and value add projects. One of its largest current projects is in the northwest GTA city of Markham, where Fiera is building a 600,000-square-foot industrial project along Woodbine Avenue, just north of 16th Avenue.
The project is being built on spec, but one tenant is already confirmed and there is strong interest in the rest of the building, which should be completed by the end of 2022.
“It’s certainly been robust for sure, quite a bit of activity on that site,” Secnik said of other potential tenants. “We’ve just put the shovel in the ground now, doing the site development and site work on that property.”
Fiera’s multifamily acquisition
The other current focus for the Core fund is multifamily reflected in the 62 Park St. acquisition.
“It is a diverse fund by nature, centred on income, so that is the philosophy from a long-term perspective,” Secnik said. “It’s heavily been focused on industrial but we do have office, retail and multires . . . we’re certainly looking at increasing our multires exposure as we grow the fund.”
The Park Street property, purchased as part of a joint venture, is a seven-storey, concrete construction building containing 82 units. Constructed in the 1960s, it is located adjacent to the Port Credit GO station.
“It’s an asset that we’ll improve; it needs a bit of capital and a little bit of love, so it will be an asset that we’ll improve over time,” Secnik said. “It’s something with a bit more management acquired, considering the vintage.”
The acquisitions bring the Core fund to just over $3.2 billion in assets under management. The portfolio includes 112 properties across Canada, and Secnik said it will continue to expand.
“We are continuing to grow and we are obviously interested in opportunities across Canada.”