Grosvenor has leased its entire Millennium 6 warehouse building on Annacis Island to a single tenant in what the British real estate company described as the single-largest lease by floor space and dollar value in its nearly 75-year history in Canada. The transaction involves the full 162,650-square-foot warehouse space and was signed with S&S, a U.S.-based merchandise distributor.
Details of the Lease
S&S, which operates a Vancouver distribution centre and represents more than 80 brands, will more than double its footprint by leasing the Annacis Island location. The company plans to invest more than $50 million in inventory at the facility. Grosvenor declined to disclose the financial terms of the lease, but Robert Duteau, Grosvenor’s executive vice-president for investment, confirmed it is the "single-largest lease within Grosvenor’s investment portfolio in our nearly 75-year Canadian history."
Confidence in the Market
“Completing this deal gives us a bit of confidence,” Duteau said. The building, constructed in 2013, is located on Annacis Island, which Grosvenor first acquired in 1952 when it entered the Canadian market. Grosvenor is now planning to construct a new 156,000-square-foot warehouse next door that will essentially be a twin of the leased facility, according to Duteau.
Industrial Market Context
Duteau noted that while the overall availability or vacancy rate for industrial spaces in Metro Vancouver has risen above six per cent from much lower levels a few years ago, large block spaces remain scarce. The vacancy rate for spaces over 75,000 square feet is below one per cent. This observation aligns with a first-quarter 2026 report from commercial brokerage firm CBRE, which stated that the rise in overall availability is "primarily driven by expanding availability within the small- and mid-bay-size segments."
Shift in Industrial Trends
The market had seen a micro-trend for smaller industrial spaces in multi-level, strata-owned buildings, but this has cooled quickly since they began appearing in Metro Vancouver about a year ago. Duteau explained that "strata is part of what helped drive industrial market values up so significantly in Vancouver, but the change in interest rates and the change in geopolitical landscape and the tariffs. The strata business is really just not there today." Grosvenor has never entered the strata industrial market.
Features of the Warehouse
S&S will move into the Grosvenor warehouse in the last quarter of 2026. The facility includes 20,000 forward-picking areas—accessible spaces where high-demand, fast-moving items are stored, allowing for broader and deeper inventory. It also features autonomous mobile robots to improve speed, accuracy, and overall order quality.
Future Opportunities
“There is an opportunity to build to suit for someone. Industrial obviously goes up a lot faster than a multi-family building in Vancouver,” said Duteau. “There’s not a lot of options with a Metro Vancouver address for a large block space.”
