Calgary Industrial Market Report

Investors believe new supply will ultimately be absorbed. Calgary’s industrial outlook is favourable despite the market rebalancing over the past year. With the metro’s total industrial inventory increasing by 13 per cent compared with early 2020 – along with a pullback in demand as occupiers reevaluate space needs in a slowing economy – Calgary’s industrial vacancy rate has risen nearly 220 basis points since the pandemic low. Nevertheless, as borrowing costs fall over the coming quarters, investors remain confident in the sector’s growth potential. Buoyed by elevated population growth, spillover effects from a healthy oil and gas sector and ongoing economic diversification, the metro’s economy and retail spending are set to outperform the nation at large. Consequently, with Calgary becoming both a local and an interprovincial distribution hub for Western Canada, this influx of supply is expected to be absorbed. This is especially true given the pullback in speculative construction starts in the first half of 2024.