Trump 2.0: The First 100 Days | Canada

Demand for Space Mixed Bag So Far Trailing Four-Quarter Net Absorption

Key Observations

• The CRE sector came into 2025 with

momentum in some sectors. As the table shows, demand for space is a mixed bag depending on the sector. • Through Q1, despite the uncertainty, demand for space has held up. Quick recap: Office net absorption continues to be negative but is trending better and the flight to quality continues. Multifamily had another strong quarter in Q1 following an above average year in 2024. Industrial demand has clearly slowed from the staggering growth years coming out of the pandemic but was mainly negative in Montreal and resilient elsewhere throughout Canada. Retail’s main issue is lack of supply as this sector is >98% occupied.

2024 Q1

2024 Q2

2024 Q3

2024 Q4

2025 Q1 General Trend

Strengthening (becoming less negative)

Office (MSF)

-4.1

-5.3

-5.2

-1.1

-2.9

Weakening (driven by one market)

Industrial (MSF)

6.5

-1.7

-3.9

-2.9

-7.5

Multifamily (000s)

Strong and stable

14,800

14,500

15,400

14,300

14,900

• Clearly a weaker economy will result in

weaker demand for space going forward, but in general, assuming a recession is avoided, the leasing fundamentals are generally expected to remain resilient.

Weakening (very limited space options)

Retail (MSF)

5.5

5.6

5.3

5.2

2.6

Source: Cushman & Wakefield Research, CoStar/Cushman & Wakefield Research

Cushman & Wakefield