Montreal industrial real estate leasing activity is expected to remain subdued in 2024 due to economic pressures, says a new JLL report.

The company offers a similar outlook for industrial property sales this year. Meanwhile, industrial availability and vacancy rates are expected to increase, while pricing expectations should decrease, says JLL.

Availability and vacancy rose 30 basis points and 50 bps, respectively in the first quarter.

Large-bay availabilities increased a whopping 42% to 12.3 million square feet, driving overall availability higher. Sublease availability spiked, encroaching two million square feet.

The completion of a 458,000-sf warehouse spelled a 32% rise in sublease availability. Owned by Harden, the $100-million fulfillment centre was originally intended for Walmart.

But as Connect reported, Walmart scrapped its plans in January with the chain saying that it wanted to unlock its stores’ omnichannel capabilities for Quebec customers instead.

The average asking rate softened marginally (0.5%) quarter-over-quarter but was down 4.2% from a record high posted in the second quarter of 2023.

Continuing a trend, the market posted 557,762 square feet of negative absorption in the first quarter of 2024. But most of the declines occurred in sub-prime markets.

The East End, Midtown and South Shore submarkets combined for 817,030 sf in negative absorption altogether, On the other hand, the West Island, Lachine, Saint-Laurent and Laval had a combined 25,650 of positive absorption.