Report shows sector's stubborn strength despite a challenging economy
The Greater Edmonton industrial market has shown resilience in the second quarter of 2025, with a decline in the overall vacancy rate despite economic headwinds. A recent report from Avison Young indicates that the region’s strong foundation, bolstered by a stable energy sector, is buffering the market against challenges such as rising tariffs and economic uncertainty.
The overall vacancy rate in the Greater Edmonton area fell by 0.1% quarter over quarter (QoQ), settling at 4.1%. This positive trend was primarily driven by surrounding municipalities, which saw a total of 93,254 square feet (sf) of positive absorption. In contrast, Edmonton proper experienced a negative absorption of 15,514 sf.
Acheson emerged as a key driver of the market’s performance, accounting for 54,757 sf of the positive absorption. According to the report, the submarket is becoming increasingly space-constrained, with less than 200,000 sf of vacant inventory remaining. This heightened demand in surrounding areas suggests a strategic decentralization by some businesses seeking more available space.
While demand remains healthy, the report points to a measured pace of new development. Rising construction costs are leading developers to adopt a more selective approach, with many waiting for a clearer signal on cost stabilization before initiating new projects.
The report notes that there is currently 1.1 million sf under construction, with approximately 950,000 sf expected to be delivered by the end of 2025. This lag in new supply, coupled with declining vacancy rates, could lead to serious supply constraints if demand continues to grow.
Edmonton’s relatively stable and predictable rental rate environment is proving to be a key appeal for occupiers. Compared to other major Canadian markets, the city offers lower rental rates, allowing businesses to plan around consistent costs. This is a significant factor in an uncertain economic climate.
The report suggests that some national and international occupiers may be consolidating their operations into the Edmonton area while downsizing their presence in higher-cost regions, indicating a broader shift in corporate priorities toward long-term value and operational efficiency.
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