Vancouver industrial space driven by large-format users in Q2
Peter Mitham, Jun 30, 2026 3:30 PM
Vancouver’s industrial market is seeing strong demand for a limited supply of large-format space, with Grosvenor Canada signing its largest-ever lease on Annacis Island.
S&S Activewear Canada Inc., a distributor of branded merchandise, has leased Millennium 6, a 162,650-square-foot warehouse at 1005 Derwent Way built in 2014. Previously occupied by two tenants, the property will now have a single tenant in S&S.
The deal more than doubles S&S’s regional footprint, with the company expecting to handle $50 million worth of inventory when it opens in the fourth quarter.
“This investment represents much more than square footage and broader inventory; it’s an investment in our people, our customers, and the long-term future of our company,” Josh Clark, chief operating officer of S&S, said in a statement announcing the deal. “Expanding our Vancouver operations strengthens our ability to serve customers across Canada while creating a more scalable and efficient network for future growth.”
The lease represents 18 per cent of Grosvenor’s total built space on Annacis, part of a portfolio of nearly 185 acres on the island.
“S&S’s decision to relocate to Annacis Island reinforces the asset as a core, high-performing industrial node advancing our broader objective of driving value through strategic leasing and aligns with our refined strategy centred on investing in Canada for the long-term,” said Grosvenor executive vice-president Robert Duteau, who leads Grosvenor’s investment and asset management activities across Canada.
The deal is part of a broader uptick in industrial leasing in Vancouver, with large-format space driving much of the recent activity.
Overall vacancies in Metro Vancouver ended the second quarter at 4.4 per cent, according to Cushman & Wakefield, which represented S&S in its quest for space. But vacancies in large-format space dropped below 1 per cent.
While overall leasing activity moderated from the previous quarter, according to Cushman & Wakefield, seven new leases greater than 50,000 square feet were completed, totalling nearly 700,000 square feet and accounting for 29 per cent of total new lease commitments of 2.4 million square feet.
Besides S&S, Toyota Canada Inc. signed a lease for 171,875 square feet in the 19000 block of 20 Avenue, Surrey.
Beyond the Lower Mainland, Toyota is planning to expand its footprint in Calgary while Amazon acquired a property in Edmonton last fall for a new distribution facility.
The demand from larger occupiers helped push net absorption across Metro Vancouver to 624,297 square feet in the second quarter, its highest level in three years.
The tenants that require large format space typically have large portfolios running across Canada or North America. Despite economic uncertainties, it’s easier for these larger occupiers to make sense of a new commitment within the scope of their portfolio than it would be for some smaller users.
“S&S occupy more than 10 million square feet across North America,” said Sean Ungemach, executive vice-chairman of Cushman & Wakefield. “When you’re averaging across a portfolio of properties, it’s not as difficult to deal with.”
The demand for space larger than 100,000 square feet is enough that options have dropped to 17 today, and those that remain are typically not Class A space.
Meanwhile, there are more than 100 options for mid-sized space.
This transaction at Millenium 6 supports Grosvenor’s plans to begin construction on Millenium 7, a new 156,000 square foot industrial building.
While no one is building on spec, space under construction has inched back over the past two quarters and now stands at 3.6 million square feet. This compares to a high of 13.1 million square feet at the end of 2022 and 2.8 million square feet at the end of 2025
“There are a number of groups ramping up to build spec on large format [space],” he said, noting that builders remain cautious. “It’s a balanced market.”
www.westerninvestor.com/british-columbia/vancouver-industrial-space-driven-by-large-format-users-in-q2-12494611
