Alberta real estate is reaping the benefits of a recovering economy, with both of the province’s major cities posting investment transaction increases during the year’s third quarter.
Large-scale transaction in Edmonton’s office market bolstered year-to-date investment sales 38 per cent over the first three quarters of 2017 and an impressive 86 percent over same period in 2016, according to a new quarterly report by real estate advisory company Altus Group.
“Investment volumes in Edmonton, through 2018, have been boosted by large institutional investors making single purchases bringing overall investment levels past the $1 billion mark for two consecutive quarters,” the report reads.
The office sector posted the most drastic increase, with 16 office transactions valued at $456.4 million recorded in the year’s third quarter – a 165 per cent increase over the same quarter last year. Office sales accounted for 40 per cent of all investment activity in Edmonton, led by the $400-million sale of the Edmonton Tower to Alberta Investment Management Corporation (AIMCo) in July.
Apartment sales totaled 570.3 million so far this year, increasing 35 per cent over the same period last year and 87 per cent over the third quarter of 2017.
Residential and retail sales posted the quarter’s only mild decreases, down 15 per cent and 3 per cent over last year, respectively.
In Calgary, overall investment sales increased 11 per cent year-over-year, supported major sales in the residential and industrial, commercial and institutional (ICI) land sectors. Meanwhile, all remaining asset classes posted declines, with multi-family sales dropping the most (33 per cent) over the course of a year.
“With an eye to the choppy results of two struggling asset classes, office and apartment, the rise in overall commercial investment from this time last year is a positive note, particularly in the land and industrial markets,” noted Ben Tatterton, manager of Data Solutions at Altus Group.