Demand for large industrial spaces is seeing steady growth amid a pullback in new construction, providing a silver lining for a sector grappling with high vacancy rates and slowing development.

Industrial occupancies for spaces over 100,000 square feet, or "bulk occupancies," are getting smaller in average transaction size but continue to gain traction. In the first half of 2024, new bulk occupancies rose by 7.4% year-over-year to 151 million square feet, despite a broader cooldown in industrial construction, according to Colliers.

The average bulk occupancy size in H1 2024 came in at 257,804 square feet, down from 289,840 square feet in the same period last year, Colliers reported. Third-party logistics firms, manufacturers, and retailers led the pack, driving demand in a challenging market for industrial landlords. Leasing activity is on an uptick, with the recent gains in bulk occupancies expected to continue through the year.