Calgary industrial market report

Q4 2023

What's the scoop?


Vacancy increases as market comes into balance

Strong demand in Calgary’s industrial market continued to drive activity through the final quarter of 2023. Much of the new construction anticipated this year was delivered in Q4, amounting to 3.9 million sf of new inventory. These deliveries helped ease the strain on the supply side and move the market more into balance.

Vacancy rates have been on an upward trajectory through 2023, and that continued in Q4 with the vacancy rate increasing to 3.6%. At this point last year, surging demand had vacancy at 2.2%, an all-time low for the market.

Q4 also saw positive absorption, a majority of which took place in pre-leased new construction. Pre-leasing of new builds remains a significant factor in the market with 35% of Q4 new deliveries being preleased. Additionally, approximately 50% of properties under construction have been leased.  

Limited availability for small-bay product

Constricted availability of small-bay product is a continuing theme to monitor. With e-commerce and last-mile logistics driving demand for large distribution centres, developers have mostly been focusing on these types of projects. However, with a record amount of people moving to the province in 2023, small business growth is inevitable, along with demand for small-bay industrial warehouse and workshop space. Pressure on this segment of the market will drive vacancy rates lower and rents higher.


Our point of view

In the year ahead, it is expected that supply constraints will continue to ease as more projects are completed and brought to market. Upward pressure on rental rates will continue, however, relatively low costs will keep Calgary in favour to those looking to relocate or expand their business from more expensive markets. The cost of capital will continue to be a challenge for developers, investors, and tenants alike as the greater economy looks to correct its course in 2024. 

Total vacancy rate

up 0.6% from Q3 2023


Availability rate

up 0.86% from Q3 2023


Sublease vacancy rate

up 0.11% from Q3 2023


Annual industrial property sales

as of November 2023


Square feet (sf) of positive absorption in Q4

3.2M year to date


Square feet (sf) delivered in Q4 

35% of which was pre-leased

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