Vancouver’s traditionally tight industrial market reached a 10-year vacancy high in the fourth quarter of 2025, says a new report from Newmark.

Industrial vacancy across the Greater Vancouver Area (GVA) rose to 3.3% at year-end 2025, marking the highest level recorded since mid-2015. Vacancy has climbed steadily since 2021, reflecting a continued easing from the region’s historical conditions.

Annual absorption totalled approximately 426,000 square feet in 2025, extending a multi-year decline that began after roughly 4 million square feet of absorption was recorded in 2020. The slowdown underscores moderating tenant demand following the pandemic-era surge in leasing, said the Newmark report authored by Andrew Petrozzi, the firm’s head of Canadian research.

Sublease space availability reached about 2.1 msf at the close of 2025 — the second-highest total recorded since research coverage began in 2008 — a factor expected to influence market dynamics in the near term.

Despite rising vacancy, leasing activity surged in 2025, particularly in the large-format segment. Tenants pursuing a flight to quality capitalized on elevated availability, with third-party logistics providers and distribution companies actively seeking modern, large-bay facilities.

A bifurcation in demand has created significant performance gaps among building-size segments. While large-format space remains in demand, small- to mid-bay inventory is facing mounting pressure. Much of the region’s vacancy is concentrated in these formats, where oversupply delivered in 2024 and 2025 has further highlighted softened demand.

Maple Meadows posted the highest industrial vacancy rate in the GVA at 6.5%, followed by Delta and Burnaby, both at 4.1%. Vancouver registered 3.8% vacancy. The North Shore remained the tightest submarket at 1.6%, followed by the Fraser Valley at 2.5%, Richmond at 2.9% and Surrey at 3%.

Looking ahead, limited new speculative development larger than 100,000 sf is underway across the GVA, creating a projected supply gap through 2026 and well into 2027. For users seeking large-format premises, build-to-suit projects remain one of the few viable options.

Federal tax measures, including the Productivity Super-Deduction allowing accelerated write-offs for capital investment tied to manufacturing and processing real estate, are expected to support additional industrial activity beginning in 2026 and beyond, according to Newmark

Photo: Courtesy of Newmark