Swedish clothing company H&M will be the sole tenant of a 716,646-square-foot industrial building being constructed at the GTA East Industrial Park in Ajax, just east of Toronto. The announcement was made during a groundbreaking ceremony for the project Thursday afternoon.
Blackwood Partners, Crestpoint Real Estate Investments Ltd. and its pension fund partner bought the GTA East Industrial Park site in an off-market transaction in May 2019 from a private family which is a large landowner in Durham Region. The land was already zoned and serviced when they purchased it.
“The intent of this facility is to service not only H&M’s existing retail outlets throughout Eastern Canada, but also to facilitate some of their online demand as well,” Blackwood development vice-president Minesh Dave told RENX in a call which also included Crestpoint director of acquisitions and asset management Lara Di Gregorio.
CBRE represented H&M in the transaction. The H&M group, which was founded in 1947 and is publicly traded on the Nasdaq Stockholm stock exchange, also oversees the COS, Monki, Weekday, & Other Stories, H&M HOME, ARKET and Afound brands.
The H&M group has 53 online markets and approximately 4,900 stores in 75 markets. It has about 153,000 employees.
Building B specifications
The second of what will be three buildings on the site at the corner of Salem Road and Kerrison Drive is dubbed Building B.
The facility offers 40-foot clear heights, 113 truck-level and four drive-in doors, high-efficiency LED lighting, early suppression, fast response (ESFR) sprinklers and parking spaces for 187 trailers and 342 vehicle parking stalls.
“The site is quite beautiful and surrounded by a ravine, so that also helps from an employee wellness perspective,” said Di Gregorio.
Durham Region Transit bus routes service the site, which is 1.7 kilometres from Highway 401, two kilometres from Highway 412, 7.3 kilometres from Highway 407 and just under 50 kilometres from Toronto’s downtown core.
H&M is expected to employ hundreds at the facility. Recruiting workers shouldn’t be an issue with 355,000 living within a 15-minute drive and 1.56 million within a 30-minute drive.
The building is scheduled for substantial completion in September 2022. The rent H&M will pay was undisclosed.
Industrial growth in Ajax
“We had a fair bit of interest from AAA covenant tenants, mostly multinationals,” said Dave. “We weren’t surprised because Durham Region is really coming alive. It has some great sites and great infrastructure and tenants are recognizing that.”
“The pace of interest in the Durham market, especially in Ajax, has increased substantially in the two-and-a-half years that we’ve been a player in the market,” said Di Gregorio. “As all of the product is being absorbed in the rest of the GTA, Durham is really rising to the top.”
Dave and Di Gregorio praised the Town of Ajax’s willingness to work with developers bringing jobs to their sites. The town’s PriorityPATH program, designed to facilitate development, has led to more than $250 million in new construction to this point.
Di Gregorio said other municipalities are looking at incorporating a similar program as a way to achieve successful development in a timely manner and bring jobs to their communities.
Blackwood and Crestpoint utilized PriorityPATH for the first building at GTA East Industrial Park, a 1.04-million-square-foot Amazon fulfillment centre which Broccolini completed construction on last month. They will also use the program for Building B.
GTA East Industrial Park’s Building C
The still-to-be-built Building C will be 189,247 square feet and offer: 40-foot clear heights; 26 truck-level doors; one drive-in door; ESFR sprinklers; parking spaces for 12 trailers; and 182 vehicle parking stalls.
“We’re ticking all of the boxes and, as a result, the leasing interest is very strong on the Building C site and we’re hoping to get that underway as soon as possible,” said Dave.
“We’ve had interest from multinational AAA covenant tenants and from smaller businesses that want a portion of the building, but not the entire building.”
Although Dave said Blackwood designs its buildings to be demisable as a way of future-proofing, he expects to lease the entire space to one tenant due to the low vacancy rates and appetite for industrial space in Ajax.
Building C is going through the site-plan approvals process and Dave said the best-case scenario would be movement starting on the project before the end of the year. Construction is expected to take eight months.
“We’re trying to leverage constructing Building B and then going straight into Building C,” said Dave.
TriAxis Construction will build both facilities.
Blackwood and Crestpoint
Blackwood is a real estate investment advisory, asset management and transaction management services firm that advises pension funds, private investors and public and private sector corporations to achieve their commercial real estate objectives.
It transacts throughout North America for both domestic and international clients.
Blackwood was recently acquired by Nicola Wealth.
Crestpoint is a commercial real estate investment manager which invests in the industrial, office, retail and multiresidential sectors and has $6.1 billion of gross assets under management.
Connor, Clark & Lunn Financial Group Ltd. — a multi-boutique asset management firm whose affiliates collectively manage more than $96 billion in assets for individuals, advisors and institutional investors — owns 50 per cent of Crestpoint.
Crestpoint’s senior management owns the other half.