Q2 2024 Vancouver Industrial Market Report

The slowdown in the Vancouver industrial real estate market accelerated in the second quarter, highlighted by near record low leasing volumes, rising availabilities, and the worst contraction in occupied space on record. While the vacancy rate only increased half a percent, the more forward-looking availability rate rose a full percent to register 4.6%, an eight-year high. A combination of factors has warehouse users taking a very critical eye on space utilization, with many opting to sublease, while also putting a halt to growth or expansion. Sublease space increased by 133,000 square feet to total 1,439,309 square feet. Of note, provincial GDP continues to trend down with 2024 growth expected to be below 1.0%. Asking lease rates were little changed, dropping just $0.18 per square foot (psf) during the quarter to average $20.63 psf. While still largely holding firm on rates, landlords have begun to demonstrate a willingness toward non-pecuniary terms.