Next phase for Calgary’s industrial market has arrived
- An analysis of net absorption, overall vacancy, and new construction reveals significant shifts in Calgary’s industrial market over the past decade. From 2020 to the present, the vacancy rate declined from 8% to a low of 2% over three years, before rising to the current level of 5%. During this period, both net absorption and new construction reached record highs, with approximately 22 million square feet (MSF) of positive absorption and around 18 MSF of newly built space.
- These fluctuations highlight the cyclical nature of the market. With most industrial activity classified as essential, and surging demand for e-commerce and logistics to support evolving consumer habits, the pandemic era triggered a boom in industrial space. In response, construction activity ramped up to meet the heightened demand as vacancy rates saw a drastic fall.
- The market has now entered a rebalancing phase. Following the substantial delivery of new properties in recent years, the development pipeline has contracted to just 1 MSF. As net absorption begins to slow, the vacancy rate has adjusted to a healthier range, signaling a more balanced market. This shift brings several positives: Calgary’s industrial sector remains resilient, underpinned by strong economic fundamentals; tenants are gaining increased negotiating power; and developers can now focus on underserved segments of the market, such as small-bay product.
June 18, 2025