Hopewell, Nicola buy GTHA industrial dev. sites for $80M - Nicola Wealth

Hopewell, Nicola buy GTHA industrial dev. sites for $80M


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By Mario Toneguzzi

 

Calgary-based Hopewell Development has partnered with Nicola Wealth Real Estate to purchase two industrial development sites in the Hamilton area for a total of $80 million.

One property, located at 9555 Airport Rd. in Hamilton, is 51 acres of land at the entrance to John C. Munro Hamilton International Airport. The second property, located at 5179 North Service Rd. in nearby Burlington, has 17 acres of land with direct exposure to the Queen Elizabeth Way highway.

The North Service Road site was purchased for $44.075 million while the Airport Road site went for $36 million.

Murray DeGirolamo, president of Hopewell, told RENX both transactions were sourced off-market and bought from private individuals. He expects the locations will attract strong interest from users looking to benefit from the regional highway connectivity.

The two sites will add more than one million square feet of development to Hopewell’s existing pipeline of projects throughout the Greater Toronto Area (GTA), and the larger region south and west of the GTA known as the Greater Toronto Hamilton Area, or GTHA.

Infill sites can be developed more rapidly

“Market demand and limited supply within the market for readily developable industrial land is a commodity. We like the strategy like an infill sort of smaller market site that allows you to come to market a bit quicker,” said DeGirolamo.

“There’s not 100-acre sites lying around the GTA, but at the same time, those are big cumbersome sites that typically take years to put into production (due to) the entitlement process. These sites allow you to be quick to market and capitalize on the current environment and the strength of the market today.”

Given the limited supply of lease options and escalating land prices in other submarkets across the GTA, the GTHA industrial markets west of Toronto in Oakville, Burlington, and Hamilton will attract strong interest from users because of their access.

DeGirolamo said the industrial real estate market is strong across the GTHA today. All the markets have seen increased values over the course of the last 12 to 18 months.

“There’s just a limited supply of product. It’s harder and harder to find opportunity. It’s harder and harder to entitle the opportunity and the overall demand curve in the market . . . tenants are requiring larger and larger footprints,” he said.

“We’ve seen . . . where companies are onboarding more inventory into North America and Canada as a whole as opposed to this just-in-time strategy.

“There’s more e-commerce . . . the growth of e-commerce through COVID. COVID had moved the pendulum even more than we were already seeing from a demand curve. It’s crazy right now.”

IMAGE: 5179 North Service Road in Burlington, which is now owned by Hopewell Development and Nicola Wealth Real Estate. (Courtesy Hopewell)

5179 North Service Rd. in Burlington, which is now owned by Hopewell Development and Nicola Wealth Real Estate. (Courtesy Hopewell)

Plans for the Hamilton, Burlington properties

He said plans are for the North Service Road site to have two smaller, mid-bay, multi-tenant buildings with a total of 276,000 square feet. The Airport Road development is planned as a mid-sized space over three buildings comprising a total of 750,000 square feet.

Both properties are being developed on a speculative basis.

Depending on the approval process, the North Service site will be ready for occupancy in early 2024, with occupancy for the Airport Road site in early 2025.

Hopewell Development, with offices in Toronto and Phoenix and its headquarters in Calgary, currently has 22 projects under development for just over 9.1 million square feet on 579.54 acres in Alberta, Arizona, Manitoba, Nevada, Ontario and Texas.

The bulk of the activity is in Alberta with 10 projects of just under 5.9 million square feet on 390.78 acres.

These are all industrial properties except for 282,189 square feet of retail in Alberta and 93,370 square feet of retail in Winnipeg.

DeGirolamo said the company has had a presence in Toronto since the late 1990s but he was challenged in 2016 to grow its footprint and brand in the area to become a true player in the market and create a national footprint.

“We have probably just in the GTA about 4.5 million square feet in the pipeline through various partnership relations or joint venture relations. It’s meaningful. We probably have a couple hundred acres that we have in the pipeline,” he said.

“Vancouver is very challenged to get into. We’re well heeled in Alberta. So it really leaves Toronto, Montreal and the Maritimes. 

“We’ve really been concentrating on trying to grow that GTA footprint and expand our brand across the country.”

Transactions expand Hopewell, Nicola Wealth relationship

In a statement, Alex Messina, director of acquisitions at Vancouver-headquartered Nicola Wealth Real Estate, said the firm is excited to expand its partnership with Hopewell.

Nicola has completed several other industrial projects in other Canadian and U.S. markets with the Calgary-based company.

“These projects provide good geographic diversity to our other industrial projects we have underway across the GTA, where leasing velocity continues to be strong,” said Messina, adding Nicola continues to concentrate its growth in major Canadian markets such as Vancouver, Winnipeg, Calgary, Victoria, Kelowna, Montreal and Toronto.

Nicola’s focus is on acquiring income-producing properties and executing development and value-add strategies.

Nicola Wealth Real Estate is the in-house real estate team of Nicola Wealth, a Canadian financial planning and investment firm with over $11.5 billion of assets under management. The NWRE portfolio now exceeds $7.5 billion gross asset value.