Sun Media
November 6, 2007
Two industrial buildings are ready for tenants and at least five more are set to go up.
Industrial developers are bullish on London.
Two new buildings are ready for manufacturing tenants and at least five more industrial buildings will rise in the city during the next year as developers are confident London is poised to land big business.
"We see business moving from the GTA along Highway 401 to the London area," said Sean Ford, principal in Brampton-based Dancor Developments.
"We are really bullish on London. It is situated in a great spot; it has a great labour force; we think it is as good as Mississauga."
In total, three developers will spend more than $80 million on speculative industrial real estate in London this year and next and create more than 1.1 million square feet of vacant industrial space for leasing.
Dancor will build two buildings in the Skyway Industrial Park next year of 55,000 and 25,000 square feet, valued at $10 million, which it will lease to small and medium-sized industries looking for a home.
The Dancor projects will add to larger projects in the works. U.S.-based O.R.E. Development Corp. has built one building, 572,000 square feet, and will start work soon on another at 112,000 square feet. Both are valued at more than $40-million on 15 hectares of land at Highway 401 and Highbury Avenue.
In addition, ING Real Estate Canada has built one building on the 401, near Wellington Road, and plans at least two more on the four-hectare site, creating 400,000 square feet of space valued at $32 million.
ING already has a tenant, a distribution centre for Culligan Water, and will cut the ribbon on its building next week.
"A lot of real estate investment funds have been looking to London. . . . We have other large developers from the GTA looking here as well," said Peter White, chief executive of the London Economic Development Corp.
Along with geography and workers, price is the big attraction in London, said Ford.
While land in the GTA can cost $750,000 an acre with development charges of at least $8 a square foot, London land sells for about $200,000 an acre privately and city land for $65,000 an acre with no development fees.
"London, to its credit, has been listening to what my community has been saying. Development charges stop development," said Ford.
Dancor sees a market in London for "feeder tenants" -- small, starting businesses needing incubator-style space before they grow, he added.
The LEDC will use the new buildings as another marketing tool to try to attract business with the pitch there's space ready and waiting, added Heather Pilot, director of business development and attraction in manufacturing for the LEDC.
Although the buildings represent a massive investment, it's hardly a risk as experienced developers study their market, added George Kerhoulas, vice-president with Cushman Wakefield LePage.