Industrial vacancy in Greater Vancouver hit 2.6 per cent in late 2024, its highest level in a decade.
Still, the region’s vacancy rate is below that of Canada (3.1 per cent) and Toronto (3.1 per cent), and below long-term historical averages, according to commercial real estate services firm Newmark Group, Inc.
The company’s March 7 industrial report for the fourth quarter of 2024 notes a weaker economy and tariff-related uncertainty, causing the market to “plateau.”
“Demand has moderated from pandemic-era highs when new supply, particularly in the warehousing and storage sector, had come online at a pace that inflated vacancy and availability, particularly in Canadian distribution hubs,” said the report.
“However, the new supply of warehouse space has moderated as the market adjusts to evolving supply and demand conditions and rents come off pandemic peaks.”
Other findings of Newmark’s report include:
- Annual absorption of about 270,000 square feet in 2024 was the least amount of absorption in the Vancouver region since 2011 but marked the 14th consecutive year of positive annual absorption;
- Sublease space availability climbed to about 2.3 million square feet at the end of 2024, the highest amount recorded in at least 16 years;
- Maple Ridge-Pitt Meadows had the highest industrial vacancy in the region at seven per cent, followed by Vancouver (3.2 per cent) and the Fraser Valley (3.1 per cent);
- The lowest vacancy was in Richmond (one per cent), followed by the North Shore (1.4 per cent);
- Industrial strata sale proceeds of $797 million in 2024 slightly surpassed 2023 but are likely to remain stable;
- Industrial sale proceeds of about $1.1 billion in 2024, not including strata, were the lowest since 2019 and the third lowest in the past decade.
The report noted that tariff-related uncertainty has blunted momentum in the sector, but that it has also “generated a more favourable environment for those tenants willing to transact as landlords try to limit vacancy.”
