A new report by Colliers Canada predicts the national office vacancy rate could peak at approximately 15 per cent by the end of 2024, as the rise of hybrid work models prompts companies to reduce their office space. However, the industrial real estate sector is seeing vacancies drop amid strong demand.
Office Vacancy Trends
The report highlights that office vacancies have been climbing as employers adopt flexible work arrangements, leading to smaller footprints. The projected peak of 15 per cent reflects ongoing adjustments in the post-pandemic era. Colliers notes that while some markets are stabilizing, others continue to face headwinds from sublease space and new supply.
Industrial Sector Booms
In contrast, industrial real estate vacancies are declining sharply, driven by robust demand from logistics, e-commerce, and manufacturing sectors. The report indicates that industrial vacancy rates have fallen to historic lows in many Canadian markets, with tight supply pushing rents higher. According to Colliers, the industrial segment remains a bright spot in the commercial real estate landscape.
Regional Variations
The report also notes regional differences: Vancouver and Toronto are experiencing particularly tight industrial markets, while office vacancies are highest in Calgary and Edmonton. Colliers expects the divergence between office and industrial performance to persist through 2025 as companies continue to optimize their real estate portfolios.
