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Market Report

Vancouver Industrial Market Report

2025 Investment Forecast

Demand Tailwinds and Supply
Challenges Maintain Positive Outlook

Vacancy rate expected to stabilize in 2025. Market rebalancing has progressed rapidly in Vancouver. The near-full occupancy witnessed back in 2022 has eased, with softening demand amid elevated interest rates and a surge in completions raising the vacancy rate to just below 3.0 per cent by the end of 2024. This loosening in market conditions has largely been observed within the large-bay segment, whereas demand for smaller-bay spaces has fared better, as local businesses have taken advantage of current market conditions to purchase properties for their own use. In 2025, however, industrial fundamentals are forecast to stabilize over the second half of the year. Lower interest rates are expected to boost leasing activity, supported by a recovery in industrial-related sectors. Compounding this momentum in demand, new supply is projected to trend down over the coming years. Not only are land acquisition costs up, but with the larger-bay segment showing some weakness, industrial land sales have also been subdued, signaling a possible pullback in supply growth in the years ahead. These supply constraints will counter the effects of the softening in demand while also exerting downwards pressure on the vacancy rate over the long run.
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