Toronto

Colocation Insights

• The Greater Toronto Area (GTA) saw significant AI-driven colocation capacity leased beyond the traditional 100-kilometer radius of 151 Front Street West, indicating a shift away from strict latency requirements toward factors like power availability and site security for AI workloads.
• CoreWeave led the wholesale colocation market in the GTA and Canada, securing approximately 52 MW of preleasing in January. Its rapid deployment, with initial infrastructure operational by June 2025, underscores the sector's urgency.
• Retail colocation continues to demonstrate healthy, inflation-adjusted growth, fueled by consistent demand from smaller enterprises and organizations.
• Scarcity of immediately available, built-out colocation space in the 3-to-6-MW range across only three Toronto locations creates a bottleneck and potential price pressure.

Market Trends

• Data center development land commands a premium over traditional industrial projects due to limited sites with sufficient grid capacity, exemplified by Prologis's 40-acre acquisition in Mississauga.
• AI deployments are driving up construction costs, with increased power density (60-132 kW/rack) accelerating the adoption of liquid cooling solutions and pushing build-out costs above $13 million CAD per project.
• Federal government AI funding and limited provincial incentives could impact development pace and regional infrastructure distribution.
• A substantial number of greenfield data center projects, ranging from 50 to 400 MW of grid capacity, are planned for 2027-2028, demonstrating strong long-term market confidence. Developers are committing to power studies and new application fees to both Toronto Hydro and Alectra.

Notable Activity

• Kyndryl's facility renewal at 3600 Steeles Avenue East (40,000 sq. ft.) and Triple Digital's acquisition of Kyndryl's 900,000-sq.-ft., 25-acre office campus highlight the ongoing value of legacy data center assets and repurposing potential.
• Hive's conditional acquisition of 15 Cityview Drive in Etobicoke (7.2 MW, former Bitcoin mining site) demonstrates the potential for repurposing existing assets for high-density, liquid-cooled deployments.
• Microsoft's pause in GTA leasing, outside its ongoing campus expansions (48 MW critical load), suggests a focus on self-built infrastructure and strategic capacity management within its defined footprint.

Figure 1: Historical Market Information

Figure 2: Market Inventory and Vacancy

Figure 3: Market Fuel Mix

Figure 4: Average Asking Rates