Metro Vancouver Industrial Market
For the fourteenth consecutive quarter, Vancouver’s industrial vacancy rate continued to rise, reaching 4.6%, a 30-basis-point (bps) increase quarter-over-quarter and a 130-bps increase year-over-year. Leasing activity also remained strong in core markets. Moreover, 3PL and warehousing tenants continue to lease space, accentuating Vancouver’s role in the national economy as a port city and gateway hub to the Asia Pacific.
Notable leases for the quarter include Canadian Appliance Source leasing 60,650 square feet at 4084 McConnell Court in Burnaby, while GoodCang Logistics leased 109,883 square feet at 8151 Churchill Street in Dayhu’s Boundary Bay Industrial Park in Delta.
A lack of new competitive supply and constraints on developable land often resulted in large-bay users accounting for their respective business and growth strategies. In some instances, these companies set their sights on new developments to accommodate such growth and expansion, leaving behind dated warehouse space on the market.
As seen in previous quarters, new speculative large-bay developments have reached the completion phase with pre-committed tenants, reflecting the flight-to-quality trend and leaving older, outdated buildings on the market for much longer. Despite active leasing activity among certain users, primarily warehousing and 3PL, the space they vacate often requires time for the right tenant to occupy, contributing to the escalating vacancy rate.
Metro Vancouver Retail Market
Overall vacancy in Metro Vancouver remains stable, with grocery-anchored centres continuing to outperform. As of Q4, the regional retail vacancy rate sits at 2.6%, partly due to the surge in inventory from recently vacated Hudson’s Bay space, along with ongoing repurposing and reconstruction projects within regional shopping centres.
While retail inventory remains scarce and availability limited, Hudson’s Bay’s exit from the retail market continues to ripple through several regional malls due to its sizable GLA footprint, leaving many landlords with large blocks of vacant space. Similar large blocks of space in shopping centres have been infilled by activity and recreational uses.
In the downtown core, Aritzia announced a 40,000 square foot, four-level flagship store in the former Nordstrom space at CF Pacific Centre, underscoring the shift toward immersive, experiential formats among national and international retailers.
In the suburbs, demand for licensed childcare space remains strong, with reputable covenants securing sizeable long-term leases. Rothewood Academy secured significant daycare space in the Pitt Meadows and Tsawwassen retail markets, addressing the growing need for childcare while highlighting landlords’ willingness to accommodate this use.
Metro Vancouver Office Market
Overall vacancy in Metro Vancouver’s office market remained relatively steady in Q4 at 9.7%, a slight increase of 30 bps quarter-over-quarter. Downtown Vancouver vacancy remains elevated at 12.5% as tenants continue to reassess space needs and take a cautious approach to leasing. Sublease space accounts for nearly 20% of the overall vacancy, though the pace of new sublease listings has slowed compared to recent years. Even with slower leasing activity, investor interest in high-quality space remains intact, highlighted by the $1.2 billion sale of The Post Building.
Tenants continue to show a clear preference for newer, well-located buildings, while older buildings face longer leasing timelines. The market is still working through space delivered in recent years, with available inventory being absorbed gradually rather than returning to the market at the same pace. With no major office tower completions on the horizon, the market appears positioned for a gradual recovery into 2026.
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