LaSalle Canada Property Fund Acquires 21-Property Toronto Industrial Portfolio
TORONTO (May 26, 2022) — LaSalle Investment Management (“LaSalle”) announced its flagship core real estate fund in Canada, LaSalle Canada Property Fund (“LCPF” or “the fund”), expanded its portfolio through a joint venture acquisition of 21 mid-bay industrial properties in the Greater Toronto Area (“GTA”) in partnership with an international capital source. The properties total nearly 810,000 square feet and are strategically located in the Mississauga industrial node, the premier submarket for servicing Canada’s largest city and just a short drive to Pearson International Airport. LCPF is participating in the acquisition through its value-add sleeve.
The acquisition represents a compelling value-add opportunity for both partners with near-term upside given rents are 60 percent below market rate and the weighted average lease term is just 1.5 years. Toronto is North America’s third largest industrial market and is land constrained due to protective zoning in the surrounding “Greenbelt” area. Historically, these factors have created strong tenant demand for industrial property, driving vacancy for industrial product in the GTA to 0.9 percent, the lowest of any North American market.
John McKinlay, CEO of LaSalle Canada, said: “We’re thrilled to execute this transaction with our international partner, which helps both parties achieve our goal of increasing our exposure to well-located assets in the industrial sector. We feel our track record of successfully executing on all types of industrial investments, whether they are core, value-add or development, positions us well to create value and generate returns even in a hyper-competitive market such as Toronto.”
Mike Cornelissen, LaSalle Senior Vice President of Acquisitions, added: “This portfolio aligns with all of our preferred attributes in terms of mid-bay product type, location, scale and upside. It’s rare to find such well-located, quality industrial properties in the Greater Toronto Area, and we’re excited about the rental upside given the portfolio’s short weighted average lease term. We appreciate the efficient transaction process with our partners, and believe the assets will meaningfully enhance our portfolios.”
The portfolio is 98 percent leased, with buildings ranging from 18,000-81,000 square feet. The properties are designed to accommodate a wide range of tenant uses, including standalone buildings for single tenants.
The GTA stands out as one of North America’s top industrial markets, driven by high population growth through immigration and exceptional rent growth. This population growth should continue to drive e-commerce demand which relies on well-located mid-bay industrial product. Through the last three years, GTA’s industrial market rents have experienced a compound annual growth rate of 20 percent, meaningfully outpacing the 8-12 percent growth seen in top US markets over that same period.
About LaSalle in Canada
On an aggregate basis, LaSalle has executed more than C$7 billion in Canadian real estate since 2000, providing it with an in-depth understanding of the market. The formation of LCPF expanded LaSalle’s existing Canadian real estate product suite and investment vehicles, which include a series of closed-end commingled funds as well as separate accounts.
About LaSalle Canada Property Fund (LCPF)
LCPF is an open-ended fund targeting core properties in major markets across Canada. The fund is targeting commitments from Canadian and global institutional investors seeking access to the Canadian real estate market through a diversified, income-oriented vehicle. Launched in 2017, the fund aims to provide investors with immediate exposure to a diverse and mature portfolio comprised of office, industrial, mixed-use, retail and multifamily assets. Through its near-term pipeline of potential future investments, the fund will seek to take advantage of mispriced assets as it continues to grow.
About LaSalle Investment Management
LaSalle Investment Management is one of the world's leading real estate investment managers. On a global basis, we manage approximately $82 billion of assets in private equity, debt and public real estate investments as of Q1 2022. The firm sponsors a complete range of investment vehicles including open- and closed-end funds, separate accounts and indirect investments. Our diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. For more information please visit www.lasalle.com and LinkedIn.
NOTE: This information discussed above is based on the market analysis and expectations of LaSalle and should not be relied upon by the reader as research or investment advice regarding LaSalle funds or any issuer or security in particular. The information presented herein is for illustrative and educational purposes and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy in any jurisdiction where prohibited by law or where contrary to local law or regulation. Any such offer to invest, if made, will only be made to certain qualified investors by means of a private placement memorandum or applicable offering document and in accordance with applicable laws and regulations. Past performance is not indicative of future results, nor should any statements herein be construed as a prediction or guarantee of future results.