Market overview

01 The streak of positive absorption ends

For the first time in the past 15 quarters, the greater Edmonton industrial market experienced negative absorption albeit, it was only -25,000 sf. Edmonton itself contributed 123,000 sf of negative absorption, however, the surrounding municipalities counterbalanced this with 98,000 sf of positive absorption.

Most of this negative absorption took place in the South/Southeast submarket, contributing -95,000 sf, followed by Central Edmonton with -25,000 sf.
 

02 Vacancy remains stable across markets

Despite the negative absorption, vacancy rates have remained relatively stable in Q2 2024. Edmonton saw a minor 10-basis point (bps) increase in vacancy, whereas surrounding municipalities experienced a slight drop of 20 bps. Consequently, the overall vacancy rate remains unchanged from Q1 2024 at 4.4%.

Two submarkets experienced significant swings in vacancy rates: Central Edmonton saw a 60-bps increase, bringing the vacancy rate to 3.3%, while Sherwood Park’s vacancy rate dropped by 80-bps to 2.7%. Northeast Edmonton and Acheson continue to be the tightest markets, with vacancy rates of 1% and 1.2%, respectively.
 

03 Sublease availability increases

Direct vacant square footage dropped across all submarkets except Central Edmonton, while sublease vacant square footage increased or remained flat across all submarkets. The most significant change was observed in South/Southeast Edmonton, where vacant headlease space dropped by 60,000 sf, but vacant sublease space increased by 154,000 sf.