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NWRE, First Gulf plan more industrial condos in Ontario

A partnership between Nicola Wealth Real Estate (NWRE) and First Gulf continues to acquire more O...

IMAGE: Nicola Wealth Real Eastate and First Gulf have acquired this property at 574-576 Bronte Rd. in Oakville, with plans to build industrial condos. (Courtesy Nicola Wealth)

Nicola Wealth Real Estate and First Gulf have acquired this property at 574-576 Bronte Rd. in Oakville, with plans to build industrial condos. (Courtesy Nicola Wealth)

A partnership between Nicola Wealth Real Estate (NWRE) and First Gulf continues to acquire more Ontario industrial properties, the latest being a 13.4-acre site in Oakville, west of Toronto.

The vacant and unimproved site at 574-576 Bronte Rd. — immediately south of Hwy. 403, on the west side of Bronte Road at the intersection with Speers Road — was purchased from Suncor Energy for approximately $8.5 million.

First Gulf was contracted to acquire the property and brought in NWRE as a partner.

“We’ve done many projects with First Gulf,” NWRE director of acquisitions Alex Messina told RENX. “They’re a trusted and valued partner, and very skilled at industrial development.”

NWRE also partnered with PC Urban Properties to acquire a 3.4-acre property at 2660 Barnet Highway in Coquitlam, B.C., where it plans another strata industrial project. The property is just west of the Coquitlam Town Centre, at the edge of Greater Vancouver.

The price was not disclosed.

At this site, NWRE and PC Urban plan to develop two buildings totalling about 100,000 square feet. 

Industrial condominium expansion plans

Vancouver-based NWRE has been involved with about 20 industrial condominium projects in its hometown and in Kelowna and Victoria.

It wants to add to that total in the Greater Toronto Area (GTA) and Montreal through multiple small-bay buildings with units ranging in size from approximately 2,000 to 5,000 square feet.

“It’s very difficult for users that require that size of industrial space to go and buy a freestanding building,” Messina explained. “At the same time, those same users have seen lease rates escalate significantly.

“We know there’s good demand from both building owners and investors. There’s good liquidity to these units. These types of buyers and business owners are typically entrepreneurs, so they’re very comfortable with the idea of owning their own real estate.”

Industrial space in the target size range is often older and there isn’t much new product available to lease. So, condos seem destined to catch on in Ontario the way they have in British Columbia as both users and investors become more accustomed to them.

“When you look at the economics of building this product, you can sell it for more on a per-square-foot basis than you could derive if you built it and leased it, or sold it in a block to a large investor like ourselves,” Messina said. “There’s an economic opportunity for developers to capitalize on this.”

NWRE has a number of other holdings in Oakville and Messina believes the wealthy city is particularly well-suited for industrial condos.

“Typically, business owners want to have their space close to where they live. We’ve had good success in picking locations that are close to where business owners and decision-makers live, which is typically in more affluent areas.”

NWRE and First Gulf

NWRE is the in-house real estate arm of Nicola Wealth, a financial planning and investment firm with $12.1 billion in assets under management.

NWRE manages a growing portfolio in major markets across North America, spanning the industrial, multiresidential rental apartment, office, self-storage, retail and seniors housing asset classes.

Its portfolio exceeds $8 billion in gross asset value after completing approximately $1.9 billion in acquisitions during 2021.

NWRE’s growth is being concentrated in the GTA, Greater Vancouver, Winnipeg, Vancouver Island and B.C.’s Okanagan region. It’s expanding into Ottawa and Montreal, with a focus on acquiring income-producing properties and value-add opportunities.

Toronto-headquartered First Gulf is a fully integrated development company that has developed more than 30 million square feet of office, industrial, mixed-use and retail properties worth more than $4 billion since its inception in 1987.

First Gulf is part of Great Gulf Group, which was established in 1975 and has major projects in Canada and the U.S.

Other NWRE and First Gulf acquisitions

NWRE and First Gulf have collaborated on several other projects in the GTA, including a large development property immediately across Bronte Road called Bronte Station Business Park that’s in the pre-leasing stage.

The partners expect to deliver buildings of 290,000 and 76,000 square feet for occupancy in Q4 2023.

A 77,000-square-foot industrial building in the southwest corner of Bronte Station Business Park is currently leased to Mancor Industries.

NWRE and First Gulf are working through the site-plan application approval process for 50 acres of industrial land at 10538 Coleraine Dr. in Brampton, where they’re looking to build multiple buildings totalling about 350,000 square feet.

The companies acquired a recently completed industrial development at 880 Avonhead Rd. in Mississauga that’s leased to Amazon.

Last year they acquired a 52-acre property on Allendale Road between Riverbank Drive and Hwy. 17 in Cambridge that offers quick access to Hwy. 401. The plan is to construct buildings of 157,000, 194,000, 275,000 and 330,000 square feet, valued at approximately $200 million upon completion.

The two partners acquired a nine-building, 473,000-square-foot industrial portfolio in Burlington, Hamilton and Stoney Creek near the Queen Elizabeth Way, but have already sold eight of them.

They’ve retained a property at 850 Legion Rd. in Burlington that had an existing leased industrial building which has now been converted to industrial condos.

“Part of the strategy was to acquire in bulk and resell the pieces as part of our merchant strategy,” Messina said. “There’s been really strong demand for industrial properties, so we’ve been able to execute on that strategy faster than anticipated.”

More NWRE Ontario industrial acquisitions

Other recent NWRE GTA and Greater Golden Horseshoe industrial acquisitions include a 20.84-acre property at 601-607 Milner Ave. in Scarborough with an existing 440,000-square-foot, two-storey building.

First Gulf is the general contractor for the project, which involves demolishing the current building and replacing it with a 350,000-square-foot distribution centre with 40-foot clear heights that should be completed in early 2024.

Pre-leasing has begun for the property, which was acquired in April 2021 and has good exposure to Hwy. 401.

NWRE acquired an 87,000-square-foot industrial plant on an 8.1-acre site at 2491 Royal Windsor Dr. in Oakville that’s currently leased on a long-term basis to Mancor.

“Our strategy is comprised of both acquiring existing income-producing properties and development sites,” Messina said. “Some we’ll retain long-term and others have natural exits, like industrial condos.”

NWRE acquired Blackwood Partners on Jan. 1, 2021, but has allowed it some autonomy.

In July the two acquired a 35-acre site at Kelson Avenue and South Service Road in Grimsby that fronts the Queen Elizabeth Way. There are plans to build more than 700,000 square feet of distribution space in two buildings.

NWRE and Blackwood also purchased 105 acres of industrial land in King Township in January 2021, where there are plans to build up to 1.8 million square feet.

The partners are working on site plan applications for the Grimsby and King Township properties.

Northbridge and Hopewell partnerships

NWRE and Northbridge acquired a 16-acre site on York Mills Road in Toronto where they’re working on pre-leasing strategies for a planned ground-up development with multiple buildings for last-mile distribution.

The two companies also partnered on a five-acre site at 7242 Hwy. 27 in Vaughan near the Hwy. 407 interchange. An old motel is being replaced by 88,000 square feet of industrial condo units.

NWRE and Hopewell Development acquired 51 acres of industrial land at 9555 Airport Rd. in Hamilton for $36 million in February that they’re working to entitle, with a goal of erecting three buildings comprising 750,000 square feet.

The two partners also purchased 17 acres of industrial land at 5179 North Service Rd. in Burlington for $44.075 million in February.

They’re working through the site plan application approval process and want to build two industrial buildings of 131,000 and 147,000 square feet to target mid-bay users.

– With files from Don Wilcox

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