A Toronto real estate investment firm has taken a nearly $100-million stake in London and St. Thomas.
Nexus Industrial REIT has made three buys of local commercial real estate, one of which is for a St. Thomas manufacturer to undergo a 70,000 square foot expansion, said Rob Chiasson, chief financial officer for Nexus.
“The market vacancy is very low. In some areas it’s close to zero,” Chiasson said. “There’s not a lot of building going on in the London market, not a lot of supply. Rents have been increasing, demand is increasing. It’s a great market for us to be in.”
In June Nexus spent $56.4 million for a 304,323 sq. ft. industrial building at 2290 Scanlan St. in east London, home to Canusa Automotive Warehousing.
In April, it paid $36 million for a 264,600 sq. ft. property at 1574 Robins Hill Rd., which home to HCL Logistics.
Both properties have tenants with long-term leases, Chiasson said.
“London isn’t as expensive as the (Greater Toronto Area). Even with rents increasing, it’s more affordable,” he said of why Southwestern Ontario remains attractive.
Nexus also paid $4.5 million in June for an 18-acre parcel of land on Dennis Street in St. Thomas, adjacent to Element5, a building materials company. Element5 is planning al 70,000 sq. ft. addition, he said.
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Element5 manufactures wood beams and panels used in building construction. The company designs and cuts panels that become walls and ceilings. They are flat-packed, and shipped to construction sites where they’re assembled to make a building, all from wood.
The company began production in April 2021, and last year it forecast its orders would double.
“With the Volkswagen plant opening it will bring a lot of demand to the area for investment,” Chiasson said of the automaker opening an electric-vehicle battery plant in St. Thomas in 2027. “All of these properties are well located, close to highways 401 and 400 and to U.S. and Canadian markets.”
Element5 now has a 137,000-square-foot factory on an eight-hectare parcel of land. It has built wooden structures across Ontario and is looking to expand into the U.S. market. It employs more than 70 workers.
“It’s obvious by the incredible volume of business that Element5 has achieved, the product is meeting the high quality and environmentally conscious demands of the booming building sector,” said Sean Dyke, chief executive St. Thomas economic development office. “I have no doubt the company will continue to grow in St. Thomas.”
In 2015, the national building code allowed wood structures to be built to a height of six stories.
Element5 makes two products, large wood panels laminated together from which walls and ceilings can be assembled, as well as wood laminated together to make beams.