Canada Industrial Figures Q2 2026

Executive Summary

• Amid positive net absorption and muted new supply, the national availability rate decreased for the first time since Q3 2022 easing 10 bps quarter-over-quarter to 5.5%. Nine of the 11 tracked markets recorded flat or declining availability.
• National net absorption totaled a modest 3.9 million sq. ft., marking the third consecutive quarter of positive leasing and bringing the year-to-date total to 7.8 million sq. ft. Activity was more broadly distributed this quarter and was led by Toronto, Montreal and Calgary.
• New supply deliveries amounted to a muted 2.4 million sq. ft., the lowest quarterly amount since Q3 2017. Construction starts totaled 4.2 million sq. ft. in Q2 2026 with speculative projects accounting for 89.4% of these projects. With starts outpacing completions, the under construction pipeline expanded 7.6% over the quarter to 25.3 million sq. ft.
• The national average net asking rental rate declined 3.9% year-over-year to $14.78 per sq. ft., largely led by Canada’s biggest industrial markets, Toronto and Montreal.

Availability rate ticks lower for the first time in nearly three years

The national availability rate eased 10 bps quarter-over-quarter to 5.5% in Q2 2026. While relatively minor, this marks the first quarterly decrease in availability since Q3 2022.

On a quarterly basis, nine of the 11 tracked markets recorded flat or declining availability in Q2 2026. The average rate of decline among these markets was 30 bps, and was led by Halifax (-80 bps), Edmonton (-30 bps) and Ottawa (-30 bps). Contractions were more muted in Vancouver (-20 bps), Calgary (-10 bps) and Montreal (-10 bps).

Availability rates remain higher in eight of the 11 markets on a year-over-year basis, however. On this time horizon, Calgary, Edmonton and Toronto are the only cities to note declines (-80 bps, -80 bps and -20 bps, respectively).

London recorded the largest year-over-year increase in availability rate at +260 bps as of Q2 2026; Montreal and Vancouver availability also rose meaningfully by +110 bps and +100 bps, respectively.

Turn in momentum continues with broad-based absorption

National net absorption totaled a modest 3.9 million sq. ft. in Q2 2026, marking the third consecutive quarter of positive leasing as the year-to-date total climbed to 7.8 million sq. ft.

Current market momentum remains above the trailing 2.1 million sq. ft. three-year quarterly average, though still below the 4.7 million sq. ft. long-run 20-yr historical average.

Leasing activity was broadly distributed this quarter with eight of the 11 tracked markets recording positive net absorption. Toronto led with 1.3 million sq. ft., followed by Montreal at 786,000 sq. ft. and Calgary at 626,000 sq. ft.

Pre-leasing continues to aid absorption, however, to a lighter extent this quarter due to lower levels of new supply. Pre-leased new supply accounted for 1.3 million sq. ft. or 32.0% of positive net absorption in Q2 2026. Calgary was the largest benefactor of this trend.

London and Winnipeg recorded the largest negative net absorption in Q2 2026 at 324,000 sq. ft. and 278,000 sq. ft., respectively, amid softer demand conditions.

National sublease space rises to a new record high

National sublease space increased 310,000 sq. ft. over the quarter in Q2 2026 to a new record high of 15.6 million sq. ft. Despite rising over the past five quarters on a square footage basis, the overall sublet availability rate is holding at 0.7%.

Toronto and Montreal continue to account for the largest share of national sublease space, representing a combined 63.9% of the total in Q2 2026.

The largest quarterly increases in sublease space were noted in Toronto at 500,000 sq. ft. and Calgary at 334,000 sq. ft. Calgary’s rise was largely driven by the return of a Sobeys Voilà grocery distribution facility following the wind-down of its Alberta online delivery service.

Year-over-year, Montreal and Victoria recorded the largest increases in sublet availability rate at +40 bps each in Q2 2026, while Vancouver saw the largest year-over-year decrease at -30 bps.

Rebound in speculative activity as overall starts slow

Construction starts have now slowed for a third consecutive quarter, amounting to 4.2 million sq. ft. in Q2 2026. On average, starts have continually trended progressively lower since 2022.

Toronto accounted for the largest share of this new activity at 2.1 million sq. ft. or 50.2% of the Q2 2026 total, with Vancouver and Calgary also contributing 654,000 sq. ft. and 552,000 sq. ft., respectively.

Speculative projects meanwhile continue to rebound and accounted for 89.4% of new starts this quarter. This is up sharply from the 39.0% of speculative starts noted across the second half of 2025.

Paired alongside lower levels of completions this quarter, the under construction pipeline rose 7.6% quarter-over-quarter to 25.3 million sq. ft. in Q2 2026, equal to just 1.2% of total national inventory.

Pre-leasing levels ease as speculative activity picks up

Nationally construction activity remains at conservative levels; aside from Ottawa, each market is currently building at less than 3.0% of their respective inventories.

Despite building at a higher construction-to-inventory ratio, Ottawa’s pipeline remains 95.5% pre-leased and will have a limited impact on market availability.

Overall pre-leasing on the national construction pipeline eased to 52.1% in Q2 2026, declining from 56.7% in Q1 2026. The decrease reflects the surge of speculative projects that launched this quarter, particularly in Toronto where the total active pipeline is only 35.3% pre-leased.

Large bay projects have continued to account for a greater share of the active pipeline, rising 3.3% over Q2 to 22.8% of total construction.

New supply deliveries fall to lowest level in nearly nine years

New supply deliveries totaled 2.4 million sq. ft. in Q2 2026, the lowest quarterly total for the Canadian industrial market since Q3 2017.

Toronto accounted for the largest share of new supply in Q2 2026 at 45.4%, followed by Calgary and Montreal at 18.0% and 15.7%, respectively.

Pre-leasing on new supply deliveries improved to 52.8% in Q2 2026. Calgary and Waterloo Region both saw near-fully pre-leased completions, while Toronto’s 25.6% pre-leasing rate for delivered product weighed on the national average.

Overall, 2026 is shaping up to result in one of the lightest years of industrial new supply since 2018. As of Q2 2026, year-to-date new supply has reached 6.9 million sq. ft., a 40.7% decline from the 11.6 million sq. ft. delivered in the first half of 2025. An additional 12.1 million sq. ft. is forecast for completion in the second half of the year.

National rent decline continues, led by largest markets

The national average net asking rental rate has continued to trend lower and declined 3.9% year-over-year to $14.78 per sq. ft. in Q2 2026.

Annual declines were led by Montreal (-5.1%), and Toronto (-4.8%). As of Q2 2026, both cities have reported declining rental rates for 10 or more consecutive quarters.

On a quarterly basis, the national average net rent declined 0.8% or $0.12 per sq. ft. in Q2 2026. Five of the 11 tracked markets meanwhile saw rents increase quarter-over-quarter, led by Ottawa (+2.2%) and Edmonton (+1.8%).

Year-over-year, London recorded the greatest increase in market average asking rents among all markets at 5.2% in Q2 2026, the result of higher quality space becoming newly available. This was followed only by Victoria (+3.2%) and Halifax (+2.6%).

CBRE Econometrics Advisors are calling for positive national rental growth to begin again starting in Q4 2026.

Sale prices near flat year-over-year with mixed market dynamics

The national average asking sale price was virtually unchanged on a year-over-year noting a marginal decline of just 0.1% to $316.62 per sq. ft in Q2 2026. Average sale pricing has remained stable over the last nine quarters, fluctuating within in a narrow $10-band.

At the market level, sale price dynamics were mixed in Q2 2026, with five markets recording year-over-year increases, five recording declines.

Winnipeg and Edmonton led year-over-year price growth at 16.3% and 15.0%, respectively, while London recorded the steepest annual price decline at -16.2% followed by Vancouver with -8.2%.

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