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Market Report

Montreal Industrial Market Report

2025 Investment Forecast

Falling Rates and Cooling Supply
Pressures Propel Market Towards a Balanced State

Vacancy rate to peak in 2025. Montreal recorded the highest industrial vacancy rate among major Canadian metros in 2024. Slowing economic growth prompted many third-party logistics companies to scale back their expansion plans, consequently reducing demand, particularly in the large-bay segment. Compounding this demand headwind is the notable inventory expansion Montreal experienced over the past three years. Total supply increased by 7.0 per cent between 2021 and 2024, compared with just 5.0 per cent in Toronto and Vancouver, Canada’s other dominate industrial markets. With interest rates expected to decline to more stimulative levels, however, this market recalibration is likely to run its course in 2025. As a crucial distribution hub in Eastern Canada, Montreal will see a recovery in consumer spending and business sentiment, bolstering activity in the transportation, warehousing and manufacturing sectors. At the same time, supply growth will dwindle significantly, as developers have paused industrial groundbreakings over the past few years amid growing concerns about oversupply. While vacancy will remain elevated compared with recent years, it is likely to stabilize around 5.0 per cent – a level indicative of a balanced market.
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