Calgary Industrial Market Report

Q1 2023

Market indicators remain favorable in early months

As the first quarter of the year ends, many of the themes that have defined greater Calgary’s industrial market have continued to prevail. Sustained pressure on the demand side and a development pipeline scrambling to meet that demand continues to affect the region. There is just under 6M square feet of space that is currently under construction and an additional 5M square feet proposed. It is anticipated that the bulk of this year’s new construction deliveries will occur in the 3rdand 4thquarters, helping to alleviate some of the pent-up demand. While vacancy rose slightly in the first quarter along with a drop in absorption levels relative to the previous two quarters, the pace of demand and leasing activity indicates that this may only be a temporary reprieve. At the current pace, the market is not expected to approach equilibrium until at least some time next year.

Investment levels in Q1 were reflective of the torrid pace seen last year, however it was noted that many of the largest sales occurred early in January. As such, it remains to be seen if signs of stagnating capital investment will reach Calgary’s industrial sector.

Economic downturn could slow investment levels

Growth of the Canadian economy slowed to a snail’s pace in the early months of 2023. Coupled with abundant geo-political concerns, there is sufficient evidence of an economic downturn ahead. However, compared to other major markets across the country, Calgary continues to provide a competitive advantage with its relative affordability and plentiful supply of vacant land. Demand originating from across the country and beyond is likely to continue as investors looking for a secure and stable return look to industrial as a preferred asset class.

Our point of view.

Calgary continues to benefit from greater trends and themes playing out in the CRE sector, and early indicators show that the industrial market is headed for another strong year. The inventory constraints the market is facing are likely to continue throughout the year and into 2024.


Total vacancy rate

up 0.09% from Q4 2022


Availability rate

up 1.1% from Q4 2022


Sublease vacancy rate

up 0.3% from Q4 2022

Improved property sales

average price of $164/sf

Square feet of positive absorption

Q1 2023

Square feet under construction

additional 4.93M sf proposed
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