Why Vaughan Leads GTA Industrial Submarkets

Vaughan has emerged as a leader in the Greater Toronto Area's (GTA) industrial market, driven by its large inventory, low vacancy rates, and prime location. As of late 2025, Vaughan accounted for 61% of York Region's industrial space, with over 105.8 million square feet of inventory. It also ranked third in Canada for industrial building permits issued and sixth for permit value, surpassing cities like Calgary and Montreal.

Key highlights:

• Low Vacancy Rates: Dropped to 2.0% by Q4 2025, demonstrating strong demand.
• Rising Rents: Average industrial rent reached $20.00 per square foot in 2024, higher than the GTA average.
• Strategic Location: Proximity to major highways (400, 407, 7), Pearson International Airport, and the CPKC Vaughan Intermodal terminal.
• Diverse Demand: Industries like logistics, e-commerce, and manufacturing drive growth.
• Major Deals: Companies such as Cizzle Brands and Distribution Stox expanded operations in Vaughan in late 2025 and early 2026.

Although competition from Peel Region and increased sublease space in the GTA present challenges, Vaughan's infrastructure, preleasing success, and transportation access position it as a key hub for industrial activity.

How Vaughan's Industrial Market Performs

Vacancy Rates and Absorption Data

Vaughan's industrial market continues to show steady performance compared to the Greater Toronto Area (GTA) as a whole. By Q4 2024, Vaughan's vacancy rate hovered between 2.7% and 2.9%, which is lower than the GTA average of 3.2%. This tight availability persisted even as the region absorbed an impressive 15 million square feet of new industrial space in 2024.

Rental rates also highlight Vaughan's strength. By the end of 2024, the average industrial rent in the city had climbed to $20.00 per square foot, reflecting a 12% year-over-year increase. Vaughan's rents surpassed the GTA average of $17.63, as well as neighbouring markets like Brampton ($18.75) and Mississauga ($19.25). Notably, this growth occurred despite a five-quarter decline in rental rates across the broader GTA.

Submarket	Vacancy Rate (Q4 2024)	Average Rent (per sq. ft.)	YoY Rent Growth
Vaughan	2.7%–2.9%	$20.00	12%
Brampton	2.8%	$18.75	11%
Mississauga	3.1%	$19.25	10%
GTA Avg.	3.2%	$17.63	N/A

These numbers reflect Vaughan's ability to maintain high demand and competitive rental rates, particularly in a market increasingly focused on smaller, versatile spaces.

Demand for Small and Mid-Sized Spaces

Vaughan's appeal isn’t limited to large-scale distribution centres. Its proximity to key transportation hubs, such as Toronto Pearson International Airport (12 minutes away) and the CPKC Vaughan Intermodal terminal, makes it a prime choice for logistics and manufacturing businesses needing adaptable spaces.

Adding to its attractiveness is the Vaughan Enterprise Zone, which spans 4,122 acres and offers the largest inventory of vacant employment lands in the region. This extensive capacity enables Vaughan to accommodate a diverse range of businesses, from small enterprises to larger operations.

Key industries driving demand include:

• Third-party logistics
• E-commerce
• Retail logistics
• Food and cold storage
• Automotive supply chains

These factors position Vaughan as a dynamic hub for industrial activity, catering to a wide spectrum of tenant needs.

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Challenges in Vaughan's Industrial Market

Rising Sublease Space in Peel Region

Vaughan, ranked fourth in the GTA industrial market, faces stiff competition from larger markets in the Peel Region, such as Mississauga and Brampton. Sublease activity across the GTA has stabilized at 3 million square feet, giving tenants more flexibility beyond traditional direct leases.

The market has shifted significantly from the near-zero vacancy rates seen during the pandemic. By the end of 2024, Vaughan's availability rate climbed to 3.7%, driven by an influx of new supply. This shift has also led to consistent drops in asking net rental rates, which hit $17.63 per square foot by late 2024.

"The GTA industrial market saw an increase in tenant-friendly conditions as a result of increased options and declining asking net rental rates." - Vaughan Economic Development

These more favourable conditions for tenants have coincided with a wave of new construction, reshaping the industrial market's landscape.

New Construction Across the GTA

The surge in new supply has created both opportunities and challenges for Vaughan. Contributing 3 million square feet - or about 20% of the GTA's total absorption in 2024 - Vaughan has demonstrated its market strength. However, this influx of inventory has also heightened competition.

This construction boom has had a noticeable impact on market dynamics. Between Q1 and Q2 2025, industrial absorption fell sharply from 2 million to just 80,000 square feet, while average asking net rents dropped below $17.00 per square foot by mid-2025 - a 6.7% decrease compared to the previous year. Developers have started pausing projects that were previously viable at $24 per square foot. Some experts suggest this slowdown could work in Vaughan's favour, as the market might face undersupply again by 2026 or 2027.

Despite these hurdles, Vaughan's strong positioning and successful preleasing efforts continue to reinforce its industrial market's resilience.

Vaughan's Competitive Strengths

Preleasing Success and Infrastructure

Vaughan has a knack for attracting tenants even before its projects are completed. In 2024, the city issued industrial building permits worth over $815.5 million, marking an impressive 116% jump from 2023. This achievement placed Vaughan 3rd nationally in Canada for both the number and value of industrial permits issued. This surge highlights the growing demand from sectors like logistics, retail, and supply chain.

The city's infrastructure plays a big role in this success. The 179-hectare Vaughan Metropolitan Centre (VMC), which includes the TTC Line 1 terminus, ensures seamless regional connectivity. On top of that, the MacMillan Yard, a key railway classification yard, supports essential freight movement.

Adding to the appeal is Vaughan's Official Plan 2025, adopted on October 28, 2025. This plan provides businesses with the regulatory clarity they need for long-term lease commitments. It also includes Employment Land Use Reviews to ensure industrial lands meet the needs of modern businesses. With strong preleasing activity and advanced infrastructure, Vaughan offers businesses exceptional connectivity.

Location and Transportation Access

Vaughan's location gives it unparalleled access across the GTA. The city sits at the crossroads of Highways 400, 407, and 7, offering quick access to major routes. This highway network also connects industrial tenants to Toronto Pearson International Airport, Canada's busiest airport, which is critical for time-sensitive logistics and supply chain operations.

Transportation in Vaughan isn’t just about highways. The city also serves as a hub for York Region Transit (YRT), Viva, and Züm bus rapid transit services, offering diverse commuting options. Vaughan's industrial inventory makes up a significant portion of York Region's total, solidifying its reputation as a key GTA submarket. These transportation advantages further strengthen Vaughan's position as a leading industrial hub in the region.

Working with Lennard Commercial in Vaughan's Industrial Market

Customized Industrial Real Estate Services

Lennard Commercial provides tailored advice for businesses navigating Vaughan's industrial real estate landscape. With over 104 million square feet of industrial inventory in the area, Vaughan's market requires a deep understanding and specialized approach. Michael Law and his team at Lennard Commercial offer services like expert site selection, lease negotiation, and investment advisory, all supported by exclusive market insights.

One of the key challenges businesses face is deciding between newer developments and established facilities. With asking net rental rates on the decline, the current market favours tenants. Lennard Commercial helps clients secure advantageous lease terms while ensuring their plans align with local regulations, such as Vaughan's Official Plan 2025. This strategy addresses ongoing market trends and positions businesses for successful growth in the region.

Using Market Data for Better Decisions

Proprietary market intelligence is essential for making informed decisions about entering or expanding within Vaughan's industrial sector. For example, forecasts show that new supply in the Greater Toronto Area will shrink from 15 million square feet in 2024 to about 10.2 million square feet in 2025, with rents expected to level off. This kind of data helps businesses time their moves strategically and stay ahead in a competitive market.

Conclusion

Vaughan stands out as a key industrial hub in the Greater Toronto Area, thanks to its strategic advantages. The city accounts for a massive 61% of York Region's industrial inventory and ranked third across Canada for industrial building permits in Q4 2025, with a permit value totalling $456.5 million. Its prime location at the crossroads of Highway 400 and Highway 401, along with its proximity to Pearson International Airport, offers businesses streamlined logistics and access to a market of over 6 million people. These factors contribute to Vaughan's strong market stability.

This stability is reflected in recent trends, such as a drop in the vacancy rate from 2.4% to 2.0% in Q4 2025, indicating ongoing demand for high-quality Class A facilities. These facilities, featuring 32-foot clear heights and infrastructure tailored for e-commerce and last-mile delivery, are particularly attractive to modern businesses. Transactions in late 2025 and early 2026 highlight how companies are willing to pay higher rents to benefit from Vaughan's exceptional infrastructure.

In a competitive and evolving market, capitalizing on Vaughan's strengths requires expert guidance. Michael Law and the Lennard Commercial team provide the insights and strategic support necessary to secure ideal locations, negotiate favourable lease terms, and align real estate strategies with long-term business objectives.

FAQs

Is Vaughan still a good time to lease industrial space in 2026?

Vaughan continues to stand out as a leading location for industrial leasing in 2026. As the largest industrial market in York Region and the fourth largest within the Greater Toronto Area (GTA), it boasts an impressive industrial inventory exceeding 104 million square feet.

What’s more, Vaughan is experiencing record-breaking development activity, further solidifying its reputation as a thriving hub for industrial businesses. These factors make it a prime destination for companies looking to establish or expand their operations.

What size industrial units are easiest to find in Vaughan right now?

Finding industrial units in Vaughan is relatively straightforward, thanks to the city's robust supply of options in various sizes. Vaughan holds the third spot nationally for industrial building permits in 2024. This ranking highlights the city's active development of new industrial spaces to keep up with growing demand.

How can my business pick the best Vaughan location for fast GTA deliveries?

Vaughan stands out as a prime spot for efficient deliveries across the Greater Toronto Area (GTA), thanks to its position as a key transportation hub. The city boasts vast amounts of developable land, excellent access to major highways and rail terminals, and over 100 million square feet of industrial space.

One standout area is the Vaughan Enterprise Zone (VEZ), which is particularly suited for logistics operations. Its location and infrastructure make it easier to ensure quick distribution and streamlined delivery not just within the GTA but also to regions beyond.