Surrey/Langley Industrial Market Report – Q1 2025
After a really strong year for renting industrial spaces in 2023, things have slowed down in Surrey and Langley in 2024. The amount of space rented this year is similar to what the area saw each year between 2017 and 2022, which was about 1.65 million square feet. Surrey/Langley has usually been pretty consistent because it’s in a good location, has good transportation, and has added a lot of new buildings, especially in the Campbell Heights area of Surrey.
Even though things have been steady overall, the percentage of empty buildings has gone up from 1% two years ago to 3.4% now. Over the past two years, the amount of space being filled has been up and down more than usual. This is because it’s been hard to find new tenants for big empty buildings when companies move into newer, better buildings. People in the market say that companies looking for space are being more careful and might be taking their time to sign deals to try and get better offers from landlords. Also, worries about tariffs and the dropping value of the dollar are probably making things less predictable.
Over the last year, only 670,000 square feet of space has been filled. This is much less than the average over the last three years (1.4 million SF) and the last five years (1.5 million SF). Some buildings, like the old MEC warehouse and the former Eddi’s Wholesale building in Langley, have been empty for most of 2024. This is because those companies moved to newer buildings in Campbell Heights and Panorama Ridge that have higher ceilings and better loading areas for trucks. At the end of 2024, there were eight properties with over 100,000 square feet of connected empty space, two that were still being built, and one 200,000 square foot space that Amazon was trying to rent out. The asking prices range from $15.75 for the old MEC building (built in 1976) up to $20.00. Just three years ago, it was very difficult to find a large, existing warehouse space of 100,000 square feet in the whole metro area.
Right now, 6.1% of all industrial space is available. This number has been going up since mid-2022, but it’s increased the most in the last year. A big new construction project at Latimer Lake Business Park (with two buildings totaling 725,000 square feet) is the main reason for this increase. There are also large empty spaces in Newton, Gloucester, and Northwest Langley. Except for the Latimer Lake project, all this space already exists and is available quickly. The market for smaller and medium-sized spaces was stable until the third part of 2024. Since then, the amount of available space in that segment has quickly jumped from 3.5% to 6%. People in the industry say that businesses in these smaller spaces are rethinking their growth plans and focusing on using their current space and operations more efficiently.
Even though Surrey/Langley has more land for building than the areas to its west, it hasn’t avoided the big yearly increases in rent that we’ve seen in the past. Rent growth has been over 10% per year since the start of 2018, peaking at 16% in mid-2022. However, rent increases have slowed down a lot recently as past interest rate hikes are affecting how much space companies need, and tenants are tired of constantly rising rents. Now, the yearly rent growth is -0.9%. Specifically, buildings used for things like manufacturing and servicing are seeing rents drop by 4.5% compared to last year.
The average rent is now $19.80 per square foot. Rents across the whole region are now quite similar, ranging from $20 to $22, except for Vancouver, where rents are over $25. The average for the whole region is $20.00, and Surrey/Langley is following the same trend. In some parts of the market, we might see the overall average rent decrease in the first three months of 2025.
Key Indicators
Net Absorption, Net Deliveries & Vacancy- Leasing
Vacancy Rate- Leasing
MARKET ASKING RENT GROWTH (YOY)
DELIVERIES & DEMOLITIONS- Construction
Construction
PAST 8 QUARTERS DELIVERIES, UNDER CONSTRUCTION, & PROPOSED
Sales
The amount of money spent on buying properties in 2024 was about 10% less than in the two years before. However, the $690 million spent in 2024 is much higher (about 185%) than the average from 2016 to 2020. So far in 2025, $117 million has been spent in 38 deals.
The people buying property in Surrey/Langley include developers who want to rebuild in the future, local individual investors, and companies that will use the property themselves. Because Vancouver doesn’t have much free land, land there is expensive, so developers buy properties in Surrey/Langley hoping to redevelop them later. For example, Bosa Properties bought Fama Business Park in June for $93.25 million. This included buildings of 315,000 square feet built in 1977 on 16 acres of land. The current rules allow for different uses like warehouses, small shops, and showrooms. While it brings in good rental income (5.5% return), the size of the land, its location, the age of the buildings, and who bought it suggest it will likely be redeveloped. The seller, CanFirst, had bought it five years earlier for $66.15 million, meaning the property’s value grew by 7% each year.
Usually, companies buying for their own use drive the market for properties under $5 million. But since mid-2024, they’ve been responsible for seven of the ten biggest deals. Top deals include the government buying a 116,000 square foot building on 9.9 acres in Newton for $86.6 million, and the BM Group buying property and a business from the C&S Group for $33.95 million. More recently, in January 2025, Ecco Supply bought a single, separate 10,600 square foot building on less than an acre in Newton for $10.4 million. This area of Newton is well-established for industrial businesses and is very attractive for companies that sell equipment and parts.
It’s hard to find big investment opportunities now, especially after four years (2021-2024) where the amount of money spent ranged from $600 to $775 million each year. The best chance to buy a significant investment property will probably be through investors making offers on properties they specifically want because it fits their existing investments. However, there are still many properties for sale with asking prices over $10 million. These are located in almost every industrial area in Surrey/Langley, from Gloucester to Bridgeview. One flexible option is a 211,000 square foot building in Langley that’s for lease or for sale at $73.5 million. It’s currently empty and has extra land at the back (53,400 square feet) that could be used for more building.
Most of the properties for sale for over $10 million are being sold by the companies that used to occupy them, so the buyer will likely get an empty building. According to people in the industry, as of early 2025, companies that will use the property themselves are mostly waiting to see what happens with tariffs before making decisions about renting or buying.
SALES VOLUME & MARKET SALE PRICE PER SF
MARKET CAP RATE
Sales Past 12 Months
SALE COMPARABLES SUMMARY STATISTICS
