Montreal Industrial Market Report

Tenants seeing more openings in 2024. As Montreal’s industrial sector continues to feel the effects of elevated interest rates, leasing demand has been following a softening trajectory since late 2022. Net absorption also declined into further negative territory in the first quarter of this year, pushing the vacancy rate above 3.5 per cent, a level not seen since 2018. This trend is expected to persist throughout at least the first half of 2024, due to slower growth in the manufacturing, warehousing, and transportation sectors. However, the increasing availability is bringing some balance to the market, offering tenants more options and facilitating growth potential among firms that would otherwise be constrained by space availability. Easier financial conditions anticipated in the latter half of the year should boost tenant optimism, aiding in the absorption of new projects completed within the past 12 months.