Soneil Investments has made headlines in the real estate market by acquiring the Millcreek Business Centre, consisting of seven industrial buildings located in Mississauga, for over $100 million from GWL Realty Advisors (GWLRA). The total area of these buildings spans an impressive 324,362 square feet, all situated on a 20-acre site.

The acquisition marks a significant milestone for Soneil, as it represents their largest industrial purchase to date. Neil Jain, the president and CEO of Soneil, expressed optimism about completing such a substantial deal in the current market conditions. "This was our single largest industrial acquisition to date, and we’re thrilled to have secured it," Jain stated during an exclusive interview with Real Estate News Exchange (RENX).

A Competitive Purchase Process

Broadened by Colliers, the transaction involved a competitive bidding process, confirming Jain's observations about the high demand among institutional buyers for such prime industrial assets. Notably, GWLRA first acquired a 50% stake in these buildings back in 2003, which they gradually increased to full ownership.

Details on Millcreek Business Centre

The buildings at Millcreek, constructed between 1987 and 1989, vary in size from 34,950 to 63,401 square feet, and each has truck-level doors to cater to different businesses' logistics needs. Currently, the property boasts an impressive occupancy rate of 92%, with 31 tenants having an average lease term of 3.54 years and rents approximately 18% below market levels. Jain noted that the present average rent is around $15.50 per square foot, which offers stability while also allowing room for rent growth.

"The average tenant size is under 10,000 square feet, ensuring minimal concentration risk. This gives us greater flexibility and less dependency on any single tenant," Jain explained.

Strategically Located for Success

One of the standout features of Millcreek Business Centre is its prime location. Easily accessible via major commuter roads, 400-series highways, and public transit, the site is also in proximity to Toronto Pearson International Airport and key rail intermodal terminals. "I believe this specific node of Mississauga is one of the strongest-performing industrial areas in the Greater Toronto Area (GTA) and even across Canada," Jain added.

Despite a slowdown in the rapid rise of industrial rents earlier in the decade, Jain noted that demand for small bay spaces remains robust. "We consistently find tenants eager to expand their spaces, which adds to the value of this investment," he mentioned.

Looking Ahead: More Acquisitions Expected!

Operating a diverse portfolio of over five million square feet of industrial, office, and retail space, Soneil is striving to capitalize on further acquisition opportunities. Jain anticipates that by 2025, as interest rates decrease and the gap between buyer and seller expectations narrows, more prospects will arise for similar acquisitions.

"Over the past three or four years, we've invested between $200 to $300 million. With this deal, we’ll be around $150 million this year. Optimistically, we could see spending ramp up to the $300 to $400 million range next year," Jain concluded.

As Soneil continues to enhance its portfolio, the firm is also exploring the potential for rezoning certain properties for future development, although Jain emphasized that there’s no immediate rush given the substantial cash flow currently generated by their assets.

Keep an eye on Soneil Investments as they strategically position themselves within the thriving industrial market of the Greater Toronto Area—could they be the next major player in real estate development?