Calgary, Edmonton and Fort McMurray are experiencing a surge in industrial real estate demand, with land prices hit eye-popping levels.
Cushman & Wakefield reports that Calgary has seen take up of 408,000 square feet of new industrial space in the first quarter of 2013, and the outlook is positive.
In a market report authored pre-flood, Cushman & Wakefield concluded: “All signs are indicating that the Calgary industrial market will continue to thrive in 2013. The United States demand for Canadian natural resources, especially oil, will continue to have strong growth implications on the Alberta economy.”
The industrial vacancy in Calgary is 6.6 per cent, and the average lease rate is $8.63 a square foot. Developers are in position to bring an additional three million square feet of space to the market from mid 2013 to early 2014, Cushman & Wakefield said.
In Edmonton and area, demand for industrial land is hotter, according to Avison Young, which concluded in a market update, “The tightening of supply has pushed asking lease rates up by as much as 20 per cent in the last six months.”
Industrial lot sales activity is only being constrained by a lack of serviced land in the capital region, Avison Young concluded.
Asking per-square-foot rates for industrial properties in greater Edmonton generally range from a low of $8 to a high of about $18.
In Fort McMurray, industrial vacancy is teetering at around 2 per cent, and while there’s more land to be serviced this year, what’s available has gone for premium prices, up to $4 million an acre, according to Avison Young. In some cases, new industrial space is demanding $50 per square foot in the oil-fired northern Alberta city.
