Canadian Storage

Q2 2025 Self-Storage Market Update: Western Canada

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The self-storage industry across Western Canada remained resilient in Q2 2025, with stable occupancy levels, continued development activity in key metro areas, and rising investor interest in secondary markets. Despite economic headwinds such as elevated interest rates and construction cost inflation, demand for storage space continues to be supported by population growth, housing transitions, and increased commercial use across British Columbia, Alberta, and Saskatchewan. 

Economic Backdrop: Regional Drivers in Play 

Western Canada’s macroeconomic environment remains mixed. On one hand, population growth—driven largely by interprovincial and international migration—is fueling housing demand, mostly in the rental sector and supporting storage needs. On the other, elevated interest rates and softening consumer spending are continuing to pressure cap rates.  

Construction costs remain high across the West, with developers facing longer timelines for entitlement and financing, especially in BC’s urban cores. Nonetheless, the region continues to attract both institutional and private capital, especially for well-located or value-add assets. 

British Columbia continues to face challenges with affordability and housing supply, particularly in Metro Vancouver and Victoria. Alberta, buoyed by a rebound in resource-related sectors and strong population inflows from other provinces, is showing healthy economic momentum, particularly in Calgary and Edmonton. Saskatchewan’s steady but slower growth reflects stability rather than expansion, with storage demand driven by smaller urban centers and rural users. 

British Columbia: Tight Markets and High Barriers to Entry 

BC’s self-storage market remains one of the most competitive in the country. In Metro Vancouver, available land for new development is extremely limited, and entitlement hurdles remain steep. These supply constraints have contributed to sustained high occupancy rates and elevated rents in most urban submarkets. Even the East Vancouver market which saw depressed rental rates due to new entrants pricing and leasing strategies has seen an uptick in rates and occupancy as of late. 

The Victoria and Kelowna markets continue to attract attention in the form of acquisitions and development from mid-sized and large operators, with both markets benefiting from strong population growth, constrained land supply, and growing demand from condo dwellers, students, and small businesses. In Victoria, new developments are focusing on mixed-use and multi-storey facilities due to land constraints, while Kelowna’s suburban expansion is creating room for more traditional single-storey developments on the outskirts especially near the Airport. 

Notable trends: 

  • Rental rates remained steady or increased modestly, particularly for climate-controlled and smaller-unit sizes. 
    • Several new projects are under construction in Langford, Surrey, Burnaby and Nanaimo, though new supply in the core municipalities remains limited. 
      • Operational excellence, including online leasing and contactless access, is increasingly a differentiator in BC’s competitive environment. 

        • Alberta: Growth Rebounds with Urban Expansion 

        Alberta’s self-storage market continues to recover, powered by job creation, affordable housing, and rising in-migration. Calgary and Edmonton are both seeing healthy demand across residential and commercial segments, with developers actively pursuing new sites in fast-growing suburban areas currently under supplied by existing storage product. 

        Occupancy levels across most stabilized facilities remained strong in Q2, generally in the mid to high 80% range. Rental rates, while lower than in BC, are rising gradually—especially in areas with newer product and limited competition. One notable trend is the increased integration of technology to improve operational efficiency, particularly among mid-tier operators aiming to compete with REITs and national brands. 

        Key observations: 

        • Developers are pursuing cost-effective suburban land near new housing developments, with a focus on 80,000–100,000 sq ft facilities. 
          • Cap rates remain slightly higher than in BC (~5.5–6.25%), attracting private investors and family offices looking for yield. 
            • Alberta’s regulatory environment is relatively favorable for development, and many municipalities remain open to storage as a permitted or conditional use. 

              • Saskatchewan: Steady, Underserved, and Opportunistic 

              Saskatchewan’s storage industry remains relatively nascent, with fewer national players and a slower pace of new development. However, this stability can be attractive for operators seeking modest competition and long-term tenants. 

              Markets like Saskatoon and Regina are beginning to experience increased activity, particularly in response to residential development and small business growth. Outside these cities, demand is often tied to agricultural and contractor-related storage needs. 

              Highlights from Q2: 

              • Rental rates remain stable and typically below national averages, but operational costs are also lower. 
                • Self-managed facilities are common, though interest in automated or remotely managed storage is rising. 
                  • There is opportunity for market consolidation and repositioning of older facilities, especially as institutional capital remains largely focused on Alberta and BC. 

                    • Demand Drivers Across the West 

                    Several structural trends continue to drive demand for self-storage across Western Canada: 

                    1. Housing Transitions – High home prices, especially in BC, are pushing residents into smaller spaces, creating demand for offsite storage. Alberta’s housing affordability is attracting movers from BC and Ontario, many of whom use storage as part of the relocation process. 
                      1. Urban Density – In cities like Vancouver and Victoria, increased densification and strata regulations make it difficult for residents to store excess belongings at home. 
                        1. Commercial & E-Commerce Use – Small businesses, contractors, and online retailers continue to rely on storage for inventory, equipment, and distribution logistics, especially in Alberta and mid-sized BC cities. 
                          1. Migration & Mobility – Rising interprovincial migration, along with seasonal shifts for students, retirees, and snowbirds, maintains a baseline of transitional storage demand. 

                            2. Competitive Landscape: Consolidation and Specialization 

                            Western Canada is seeing continued interest from major operators like SmartStop, StorageVault, BlueBird, and Prime Storage, especially in urban centers. However, independent operators still control a large share of the market in many regions, particularly in Saskatchewan and suburban Alberta. 

                            Several trends are shaping competition: 

                            • REITs and consolidators are expanding their portfolios, particularly targeting value-add and underperforming assets as well as larger portfolios of storage. 
                              • Technology adoption is accelerating, with mobile access, digital leasing, and dynamic pricing becoming standard among top operators. 

                                • Development & Investment Trends 

                                While interest in new developments remains strong, high interest rates and elevated construction costs are forcing developers to be more selective. Projects in high-growth corridors with clear demand signals are moving ahead, while others are being delayed, downsized or cancelled altogether. 

                                Notable Q2 development trends: 

                                • Multi-storey, climate-controlled facilities are favored in urban cores (Victoria, Vancouver). 
                                  • Suburban Alberta markets are seeing a rise in traditional, drive-up style projects on lower-cost land. 
                                    • Developers are increasingly pursuing mixed-use or conversion opportunities (e.g., former retail or industrial buildings), particularly in areas with zoning flexibility. 

                                      • Investment activity remains healthy, particularly for stabilized assets with strong cash flow. While cap rates have ticked up slightly from the lows of 2021-22, the spread over borrowing costs is narrowing, which could impact transaction volumes if rates remain elevated. 

                                      Risks and Constraints 

                                      Several challenges could affect the Western Canadian self-storage sector in the second half of 2025: 

                                      • Overbuilding in select markets – Some submarkets in Metro Vancouver and Calgary show early signs of potential saturation, especially with multiple projects delivering in short timeframes. 
                                        • Rising operating costs – Insurance, utilities, and property taxes continue to increase, pressuring NOI. 
                                          • Zoning limitations – In BC especially, restrictive zoning and community opposition can derail or delay new developments. 
                                            • Interest rate volatility – Refinancing risk remains a concern for leveraged operators, especially those with short-term debt coming due in the next 12–24 months. 

                                              • Notable Transactions 

                                              Maple Leaf Storage 

                                              We have covered the sale of the Maple Leaf Portfolio in another article however this sale was record setting in Canada in both size at almost 1 billion dollars and for the Cap rate paid by QuadReal for the almost 1.7 million square foot portfolio.  For more information look for our analysis of this sale on our Website.  

                                              Spacious Storage Kelowna 

                                              SmartStop closed the sale of Spacious storage in April of 2025. This facility was a purpose-built Class A facility with about 75,000 rentable sq ft of storage run by a local operator.  This transaction was the largest storage sale in the interior of BC in recent years and marks SmartStop’s entry into the Kelowna Market.  

                                              Pockit Storage Vancouver 

                                              SmartStop completed the purchase of the Pockit Storage on Clark Street in East Vancouver in late June 2025 from Hungerford Properties and Harrison Street Real Estate.  this marks SmartStop’s second Vancouver asset and third asset in BC.  Although sales metrics have yet to be released, our understanding is that the Cap rate was above that of their purchase of Key Storage on Franklin Street and the price PSF was below that sale as well.  

                                              Strategic Takeaways 

                                              Q2 2025 demonstrated the continued strength and resilience of the self-storage sector across Western Canada. While economic uncertainty and cost pressures are real, long-term demand drivers remain intact—particularly in regions with population growth, housing constraints, and active small business sectors. 

                                              Operators should: 

                                              • Focus on operational excellence and customer experience to retain tenants and justify rate increases. 
                                                • Be selective with development—targeting underserved growth corridors with zoning flexibility and demonstrated demand. 
                                                  • Consider strategic acquisitions of older, underperforming assets that can be repositioned through branding, automation, or modernization. 

                                                    • As we head into the second half of 2025, Western Canada continues to present strong fundamentals for both new entrants and established players. Success will depend on adaptability, regional insight, and execution. 

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                                                    Canadian StorageBy Patrick Wood