Industrial lease rates in Lethbridge have pulled even with Calgary as tenant takeup goes in different directions in the two Alberta centres.
The average industrial lease rate in Lethbridge ascended to $8 per square foot in the first quarter, while it declined to the same level as in Alberta’s biggest city.
Lethbridge also saw the absorption rate (lease and sale of industrial space) reach 50,000 square feet, while Calgary experienced negative absorption of nearly 1.8 million square feet in Q1.
The Calgary industrial vacancy rate has spiked to 8.5 per cent, up from 5.8 per cent one year ago.
In Lethbridge, industrial vacancies are at 6.2 per cent, up from 3 per cent in the first quarter of last year.
Avison Young, which provided these numbers, is more bullish on Lethbridge than on Calgary. “With optimism running high, Lethbridge’s industrial market should continue to accelerate throughout 2017,” the agency notes.
Calgary not so much.
“Calgary’s current forecast is for [industrial] vacancy to remain flat through 2017 and start tightening in 2018 as business confidence improves,” Avison Young stated.
And Edmonton? The industrial vacancy rate is 6.3 per cent, and its average lease rate is also higher than Lethbriodge, at $9.87 per square foot.
But Edmonton’s industrial absorption rate is down about 500,000 square feet this year from 2016.