Vancouver Industrial Market Report

Supply shortfall to aid fundamentals. Vancouver boasts Canada’s most-costly industrial market for tenants, due to its extremely low vacancy rate. Strong demand from the e-commerce industry over the course of the pandemic far outpaced new supply growth, which suppressed availability to near-zero levels in 2022. Although net absorption briefly slowed in the final quarter of last year, vacancy remained below 1 per cent. Currently, most new projects are pre-leased, and tenant competition for large-bay facilities remains fierce. In 2023, the metro will see an over 50 per cent annual increase in completions. Vacancy, however, will likely remain subdued as nearly 70 per cent of the current projects under construction are pre-leased, despite the expected slowdown in economic growth. For the metro’s availability to rise to a more balanced level, construction activity will need to pick up further and remain elevated for an extended period of time.