Calgary industrial market report

Calgary industrial market trends

 

Activity in Calgary’s industrial market picked up in Q3 with 846,068 square feet (sf) of positive absorption recorded. Overall vacancy and availability rates both decreased by 0.4%.

01. Supply dynamics continue to shift

Developers have taken a conservative approach in 2025 resulting in a decline in construction starts for distribution centres and big bay multi-tenant facilities. Meanwhile, demand for mid and small bay product has been growing. Rents for both categories are seeing upward pressure, along with increased leasing activity. 
With the development pipeline for large format industrial at relatively low levels plus a sustained leasing environment, it’s possible the market could pivot back to being under supplied in the coming year.

 

02. Sublease space on the rise

The amount of sublease space entering the market has been increasing in 2025. Occupiers are re-evaluating expansive spatial requirements following a multi-year period of rapid growth driving an increase in sublease vacancy. Currently, 1.6 million sf of vacant sublet space is listed on the market, which is a 14% increase from Q1 2025. The sublease vacancy rate currently sits at 0.94%. It is anticipated that this will place downward pressure on sublease rates as landlords compete for occupiers. This is contributing a notable counter-balance to market demand, providing enhanced leverage for large prospective tenants.

 

03. Serviced land facing constraints

The market is facing a bottleneck of development-ready serviced land, evidenced by the decline of industrial land sales over the past year. Industrial land sales in 2025 total $127 million YTD, well down from the high mark set in 2022 of $450 million. Much of the supply within the city limits is controlled by the City of Calgary, while institutional land holders have shown a preference to develop their holdings before selling. Meanwhile, the small number of private land holdings, such as those in Constellation Business Park, are in high demand and selling quickly.