Vancouver’s industrial vacancy reached 4% in the first half of 2025, its highest level since early 2015, according to Avison Young.

Leasing activity remained steady as larger firms took advantage of softer conditions to secure modern premises on more favourable terms. Sales volume rose 94% over the prior half to $1.2 billion, but investment is still restrained by a wide pricing gap, leaving activity largely in the hands of owner-users. Developers face growing challenges, with just 32% of strata space in recently delivered projects presold compared with 71% in 2023. The sector’s long-term appeal continues to attract out-of-market buyers, though rising surplus inventory is pressuring values.

Tariff uncertainty is adding to headwinds. On August 1, the U.S. raised duties on goods that do not comply with the Canada-U.S.-Mexico (USMCA) free-trade agreement to 35% from 25%, with little sign of relief in ongoing negotiations.

Other asset classes posted stronger results. Retail led the market as transaction volume nearly doubled from the previous half to more than $700 million, supported by demand for grocery-anchored properties. Office sales climbed 44% over the same period, reaching $801.1 million, with class AAA and A towers outperforming.

Development activity across all asset types continues to cool amid high construction costs, increased development cost charges and rising municipal fees.

Photo: Avison Young