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VANCOUVER — Metro Vancouver’s industrial market has surpassed three per cent for the first time in nine years, according to a new Avison-Young report.

Vacancy reached 3.1 per cent in Q3 2024, the report said, marking a 20-basis point increase from the previous quarter.

“The last time the vacancy rate surpassed three per cent was in Q2 2015, when it stood at 3.8 per cent. Over the past two decades, vacancy rates have fluctuated between a low of 0.3 per cent in Q2 2022 and a high of 4.7 per cent in Q1 2010,” the report said.

Although the vacancy rates have risen for over nine consecutive quarters, the current rate of 3.1 per cent is amongst the lowest in major Canadian cities.

“For larger tenants seeking spaces over 100,000 square feet, there were 18 available options in Q3 2024, compared to 13 options last year and just two options three years ago,” the report added.

Thirteen new projects broke ground this quarter leading to the highest total area under construction in the past year.

Of the 61 projects currently under construction, the report said, 28 per cent of the space is dedicated to strata developments, up from 19 per cent in Q3 2023. There was also an increase in the percentage of pre-sold under construction strata units, rising from 20 per cent in January 2024 to 34 per cent in September 2024.

Average net rental rates have declined but gross rents remain steady, the report added.

Net rental rates decreased 2.8 per cent quarter-over-quarter and in Q3 2024 average net asking rents stood at $20.74 per square foot, down from a peak of $21.99 in Q3 2023. Over the same 12-month period, additional rent costs have risen, keeping gross rental rates stable despite a marginal drop from $27.29 in Q3 2023 to $27.14 in Q3 202, the report said.

The two submarkets have consistently exceeded the $30 per square foot mark in gross rents, with North Vancouver at $32.32 and Vancouver at $30.83. 

The full report is available .