Montreal industrial market report

Q4 2023

Slight increase in vacancy in Q4

The vacancy rate rose by 0.4% this quarter to 2.6%.  This is the fourth consecutive quarterly year-over-year increase. In the multi-tenant market segment, the vacancy rate exceeded 4% for the first time since the end of 2019.  
1.7 MSF


Sublet availability has drastically increased from around 650,000 sf in Q4 2022 to 1.7 million square feet (msf) in Q4 2023. Sublets now make up almost 10% of all industrial space on the leasing market. Direct availability has also seen a substantial year-over-year rise, with a 48% jump, from 10.8 to 15.9 msf.

5.3 MSF

Under construction

Availabilities of 100,000 square feet and above account for 7.5 msf of space, or some 40 active listings, which represents 42% of total space for lease. 
With over 5.3 msf of projects underway, most of them being large-scale, availability in this segment could remain high. On the other hand, the shortage of space in the 20,000 to 50,000 sf range persists, and since a minimum area of 70,000 sf is required for new industrial construction to be financially viable, construction activity will have a negligible impact on this shortage.

$16.45 PSF

Average net asking rent

Average rental rate fell for the second consecutive quarter. However, this six-month decline is quite modest, at only 35 cents. Net asking rent is on average $2.00 psf more expensive than at the start of 2022. Rental declines this quarter are more pronounced in older buildings. Conversely, rents for class A industrial buildings are holding steady, but landlords are more open to negotiating free rent, leasehold improvements, and other incentives.

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