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Too Much or Not Enough?

Research Weekly Insights Indurial Hero
Will major industrial markets in Canada exceed 3% vacancy in the next two years? A balanced industrial vacancy rate is approximately 3-5%. This provides options within the market for expansion, relocation, or opening new locations, without significant pressure on rental rates.

Of the six major markets in Canada, one – Edmonton, at 4.3% as of Q3 - is in this range, with the rest at or below 2%. Tight market conditions have been in place since early in the pandemic, when e-commerce took off, driving demand for distribution space.

As the economy slowed recently, industrial vacancy has increased. This easing has been welcomed in most markets, as vacancy rates had been unsustainably low, even with sizeable delivery of new space. As markets move into this next phase of the real estate cycle, are we building enough space or too much?

Research Weekly Insights Industrial Graph

Montreal is the only major market building less space than needed to reach 3% if no leasing takes place. Vancouver, Toronto, and Ottawa are building in line with average absorption trends and are therefore susceptible to rapid swings in demand. Calgary and Edmonton are building more than the amount of additional vacant space or unleased new supply required to reach 3% and seem likely to reach this level of vacancy in the next 12-24 months. (As mentioned, Edmonton is already above 4%). The excess construction in Alberta may also be a move to lure occupiers from Vancouver who cannot find suitable options and are able to serve their needs from Alberta.

Most major markets in Canada have moderate-to-high probability that industrial vacancy will rise into the balanced range over the next two years.


Pour plus d’informations, veuillez contacter:

Susan Thompson

Associate Director, Research

Vancouver - Rogers Tower

Susan is a long-standing analyst and commentator on the commercial real estate market.  Her continuing work with local, national, and international media as a commentator for the commercial real estate sector has given her recognition within the industry as one of the preeminent sources of information and knowledge for leasing and transaction analysis and market trends.

Susan was previously with Avison Young working as their Research and Insight Manager over the course of nine years  (a boomerang employee: with them for four years, away for five years, then back for five years). She was responsible for dozens of reports on the Calgary commercial real estate market, covering office, retail and industrial leasing as well as business condominium properties and commercial property sales. More recently she focused on data-driven storytelling through reports, media work, and client engagement utilizing techology and analytics to help make better-informed decisions. 

In between periods with Avison Young, she spent over five years with Calgary Economic Development; first as their Business Development Manager specializing in Real Estate, helping companies bringing their business to Calgary navigate the local commercial real estate market, then as their overall Research Manager providing economic analysis and commentary on the Calgary market.

In prior years, after starting her career in assessment, Susan spent over seven years with RealNet Canada, the leading provider of third-party commercial real estate sales information. Working her way up from Research Analyst to Manager for the Calgary office, Susan analyzed thousands of commercial real estate transactions and is extremely knowledgeable about the commercial real estate market in Calgary. 

Susan has a Bachelor of Commerce degree, with a major in Management Science from the University of Alberta. Well recognized in the industry, Susan’s name is often seen in the media as she provides commentary and insight on current commercial real estate topics. Susan's breadth of knowledge across the commercial real estate market and in data analytics is an asset across the industry.

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