Montreal Industrial Market Report

Prolonged trade disruptions keeping space demand muted. Higher U.S. tariffs on aluminum and steel products have weighed heavily on manufacturing-dependent communities in Quebec, leading to job losses and weaker export volumes. In Montreal’s industrial sector, this has translated into three consecutive quarters of negative net absorption in 2025. Unlike the national trend – where negative absorption narrowed in the third quarter – Montreal saw a sharper decline in space demand, with 2.8 million square feet vacated year to date. The South Shore submarket, containing a high concentration of distribution, logistics and manufacturing firms, has been hit hardest, accounting for the bulk of the decline. Looking ahead, lower interest rates should help support consumer spending and provide some relief to the metro’s transportation and logistics industries. Even so, trade disruptions are expected to remain the dominant headwind weighing on overall space demand. As a result, the vacancy rate is projected to rise further, approaching 6.0 per cent by year-end.