- What Calgary’s positive absorption streak for industrial space has ended
- Why The city saw 3.4m sq ft of new space over the last year
- What next Trade tensions are driving up costs and could delay proposed developments
Calgary’s streak of nine consecutive quarters of positive industrial market absorption came to an end in the first quarter of this year, according to Savills Research and Data Services.
Net absorption was negative 800,000 sq ft in Q1 2025, Savills said in its report. That compares to 2.6m sq ft of positive net absorption in Q1 2024.
Despite that, leasing activity remained robust. The city’s vacancy rate was 3.4% in Q1, 30 bps lower than the same quarter last year, when the vacancy rate was 3.7%.
“Occupiers continue to show confidence in the region’s long-term value proposition,” the report said.
Savills said the average asking rate in Q1 declined 0.9% year-over-year to $10.64/sq ft.
Calgary’s industrial market enjoyed a steady pace of development over the last year, leading to an inventory expansion of 3.4m sq ft.
No new stock is expected to be completed this quarter.
A lull in speculative construction and continued tenant demand could mean stiffer competition for industrial space later this year, the research company said.
But the potential harm from the trade war with the United States is top of mind for businesses and is influencing the commercial real estate market. The Savills report said trade tensions are driving up construction costs and could delay proposed developments, as developers reassess timelines and budgets.
The biggest deal of the quarter was Princess Auto’s lease of 1 Nose Creek Boulevard, where the company is moving into a 605,000 sq ft space.
Only one industrial sale broke the $10m mark for the quarter. The sale of a 70,000 sq ft building at 1517-1561 Hastings Crescent SE for $11.2m. Midapore Property Investments was the vendor, with Resman Holdings picking up the asset.
