Metro Vancouver Industrial Market
After rising for 14 consecutive quarters since Q3 2022, the regional vacancy rate declined by 10 basis points to 4.5%, marking the first quarterly decrease over that period.
The overall Vancouver industrial market recorded 720,000 square feet of new supply, concentrated in municipalities north of the Fraser River and primarily made up of multi-phase developments with strong pre-sale and pre-leasing activity. Namely Winston Heights Business Park, a five-building development in North Burnaby, Cade Barr Business Park in Mission, and 820 Seaborne Avenue in Port Coquitlam.
Net absorption remained positive for the second consecutive quarter, totaling 889,244 square feet. Leasing activity was particularly active in the Fraser Valley, with Surrey and Delta leading demand as third-party logistics users secured large-block warehouse and distribution space.
Metro Vancouver Retail Market
Metro Vancouver’s retail market recorded a modest increase in vacancy, reflecting in part the continued impact of Hudson’s Bay’s nationwide closures. In Langley, Toys “R” Us vacated its 43,970-square-foot Willowbrook location, introducing a meaningful block of future availability.
Investment activity remained active during the quarter. Brookfield Asset Management sold the retail podium of the Park Hyatt Vancouver to Aquilini Investment Group for $55 million, while OpenRoad Auto acquired a 16-acre parcel from Conwest in Surrey’s Newton neighbourhood for a planned auto mall.
New York-based REIT W.P. Carey acquired several Go Auto dealership properties across Western Canada, including seven in Metro Vancouver, for approximately $217 million, representing nearly half of the quarter’s investment volume. As a host city for the 2026 World Cup, Vancouver’s downtown and will anticipate an economic boost way of international tourism and consumer spending in downtown core.
Metro Vancouver Office Market
Despite elevated vacancy, Metro Vancouver office market remains stable as leasing activity increases with no major new supply. The downtown core continues to see a higher vacancy rate than the suburban markets. Meanwhile, overall rents have slightly decreased across the region, as landlords adjust expectations to stay competitive. To attract tenants, landlords are increasingly offering flexible lease terms and incentives to help support occupancy levels, particularly in older buildings. At the same time, newer and well-located buildings continue to perform relatively well, pointing to an ongoing flight to quality.
Investment activity continues to pick up, with this quarter’s highlight being BGO’s acquisition of Oceanic Plaza at 1066 West Hastings Street. These transactions show that investors remain interested in high-quality downtown properties, even with the high vacancy rates. Looking ahead, the limited pipeline of new office deliveries is expected to help further stabilize vacancy levels.
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