Canada’s Industrial Market Recovery Expected to Translate Into Positive Rent Growth by Late 2027

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Postmedia has not reviewed the content. by Business Wire Canada's Industrial Market Recovery Expected to Translate Into Positive Rent Growth by Late 2027Author of the article:THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountNew forecast finds improving absorption and slowing construction will set the stage for renewed rent growthARLINGTON, Va. — Canada’s industrial vacancy rate is expected to decline steadily through 2028, setting the stage for a return to positive rent growth by late 2027, according to a new forecast from CoStar Group, the leading global provider of online real estate marketplaces, information and analytics in the property markets.The national industrial vacancy rate, which climbed from 1.5% in 2022 to 4.75% in 2025 amid a wave of new construction and slowing absorption, has already begun to ease, falling to 4.5% as of this analysis. CoStar’s updated forecast calls for vacancy to decline to less than 4% by the end of 2027 and to 3.25% by the end of 2028 – slightly lower than the previous forecast, which had projected a decline to 3.5% by the end of 2028.Net absorption, which turned negative in the first half of 2025, has rebounded to average about 5 million square feet per quarter since the start of 2026. CoStar forecasts absorption will average 7.5 million square feet per quarter from the third quarter of 2026 through the end of 2027, supported by continued growth in consumer spending and a resurgence in export activity, before settling at about 5 million square feet per quarter starting in 2028.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“Absorption has really bounced back since late 2025, and with a sharp pullback in new construction, that combination is pushing vacancy steadily lower across the country,” said Mario Lefebvre, chief economist for Canada at CoStar Group. “Given the improvement in the balance between supply and demand, we expect rent growth to we expect rent growth to remain roughly flat for most of 2027 before beginning to trend upward late in the year and continuing into 2028.”“The balance of risks in this forecast remains tilted to the downside,” Lefebvre said. “Trade and tariff uncertainty, elevated operating costs including higher fuel costs, and a declining population could weigh on expansion plans for industrial tenants and delay the recovery in demand. Over the longer term, however, we expect demand for industrial space in Canada to grow along with consumer spending especially while the development pipeline remains modest.”The full forecast can be found here.CoStar Group (NASDAQ: CSGP) is a global leader in commercial real estate information, analytics, online marketplaces, and 3D digital twin technology. Founded in 1986, CoStar Group is dedicated to digitizing the world’s real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives.CoStar Group’s major brands include CoStar, a leading global provider of commercial real estate data, analytics, and news; LoopNet, the most trafficked commercial real estate marketplace; Apartments.com, the leading platform for apartment rentals; Homes.com, the fastest-growing residential real estate marketplace; and Domain, one of Australia’s leading property marketplaces. CoStar Group’s industry-leading brands also include Matterport, a leading spatial data company whose platform turns buildings into data to make every space more valuable and accessible; STR, a global leader in hospitality data and benchmarking; Zonda, a leading provider of data, analytics, software, and marketplace solutions for the residential construction industry; Ten-X, an online platform for commercial real estate auctions and negotiated bids; and OnTheMarket, a leading residential property portal in the United Kingdom.CoStar Group’s websites attracted over 118 million average monthly unique visitors in the second quarter of 2026, serving clients around the world. Headquartered in Arlington, Virginia, CoStar Group is committed to transforming the real estate industry through innovative technology and comprehensive market intelligence. From time to time, we plan to utilize our corporate website as a channel of distribution for material company information. For more information, visit CoStarGroup.com.This news release includes “forward-looking statements” including, without limitation, statements regarding CoStar’s expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that economic conditions adversely affect demand for industrial space, resulting in higher vacancy rates and weaker rent growth than forecast. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2025 and Forms 10-Q for the quarterly periods ended March 31, 2026, June 30, 2026, and September 30, 2025, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website ( www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.View source version on businesswire.com: This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.