New supply pushes vacancy rate upwards for large industrial buildings in Greater Montreal
Vacancy has been rising steadily over the past year, from 2.0% in Q1 2023 to 2.2% in Q3 2023, and our data show that the upward trend varies according to building size.
- The vacancy rate in Greater Montréal's industrial market, at 2.6% in Q4 2023, remains historically low. However, vacancy has been rising steadily over the past year, from 2.0% in Q1 2023, to 2.1% in Q2 2023 and 2.2% in Q3 2023, and our data show that the upward trend varies according to building size.
- Vacancy rates for larger buildings, 500k sf and over, increased more significantly in the second half of 2023, from 3.58% to 4.55%, an increase of 77 basis points (bps). The smaller building segment, 20k-99k sf, is the most stable, with an increase of only 31 bps over the same period. With less new construction in this segment, availability is bound to remain limited.
- Vacancy rates for larger buildings is likely to continue pointing upward, as this segment represents 54% of the new 7.2 million square feet (msf) delivered to the market since 2022, and more than 75% of the 3.6 msf currently under construction for delivery in 2024 and 2025. The recent industrial listings that were added to the sublease market, including two 300,000 sf and 350,000 sf spaces in Saint-Laurent, are also adding pressure to vacancy rates in this market segment.