- What Calgary’s industrial market has felt the effects of completed supply
- Why Vacancy and availability are on the rise
- What next Another 5.2m sq ft worth of industrial space is proposed for the region
Vacancy and availability rates in Calgary’s industrial market are on the rise amid a record amount of new space coming online, Avison Young said in a Q2 market report released Tuesday.
Year to date, 1.2m sq ft of projects have been completed, with 49% of that space preleased. During Q2, the vacancy rate ticked up 2% year over year to 4.5%, while the availability rate rose to 5.1%, up 0.8% over Q2 2023. The market notched negative 353,000 sq ft of absorption in Q2.
Increased supply has worked to keep rents flat with the previous quarter.
“With this shift in market dynamics, tenants are now finding themselves with more options than previously available,” the brokerage said. “New tenants, and those looking to expand, have more choices among newly built spaces.”
The amount of space being developed is trending down, with 2.5m sq ft under construction and a further 5.2m proposed.
Despite the “cooled” development pipeline, the brokerage said, the demand for small and midsize bay spaces has remained strong. Prices for developable land also continue to move higher.
With more interest rate cuts expected, the investment outlook is improving for the market. This year has seen 65 transactions so far, tallying $185m.
“Given the market fundamentals that have powered Calgary through the economic downturn, we anticipate that market investment will remain steady, with a strong likelihood of further growth,” Avison Young said.
