Amid ongoing economic uncertainty and trade-related challenges, Vancouver’s industrial real estate market continues to experience rising vacancy rates alongside plateauing asking lease rates. The regional vacancy rate rose by 60 basis points to 4.0%, marking the twelfth consecutive quarter of vacancy growth and matching the highest rate recorded in the past decade. Asking lease rates remained steady at $19.92 per square foot across the region, though some municipalities experienced quarter-over-quarter (QoQ) fluctuations due to localized market dynamics.
After two straight quarters of positive absorption, the Vancouver industrial market saw a slowdown in leasing activity. This shift, combined with new vacancies, pushed net absorption back into negative territory. The Greater Vancouver submarkets recorded negative absorption totalling –310,000 square feet, while the Fraser Valley showed positive net absorption of 109,255 square feet. A closer look reveals that Surrey was a key contributor to the positive activity, posting 303,098 square feet of positive absorption. In contrast, Delta and Abbotsford combined for a net negative absorption of approximately –380,000 square feet.
Leasing activity is slowing among third-party logistics (3PL) providers and distribution-focused tenants, indicating a more cautious approach to space commitments. Despite softer demand, the overall regional availability rate held steady at 6.2%.
The development pipeline remains active, with several new industrial projects delivering or nearing completion in the second half of the year. Notable recent completions include portions of Cedar Coast’s multi-building Riverside Road Business Park in Abbotsford and Wesgroup’s Elevate, a multi-level industrial project in Coquitlam.
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