2012 Global Market report - NAI Global

Calgary, Alberta, Canada
Edmonton, Alberta, Canada
Contact
NAI Commercial Calgary
+1 403 214 2344
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
3,855,100
2.7%
$1,632.89
$47,340.29
2.0%
7.5%
1.0%
34.493
Calgary is the largest city in Alberta with a population closing
in on 1,100,000. It is located in the southern half of Alberta,
just two hours north of the US border and one and a half
hours east of the Rocky Mountains. Calgary is a distribution
center for western Canada as well as home to the head
office city for the Alberta Oilsands. 2011 was a recovery
year in Calgary as projects are taken off the shelf and
vacancy rates return to historical averages.
Calgary’s downtown office market is on the verge of eclipsing
40,000,000 SF due to the development of over 10,000,000
SF in the last six years. This unprecedented building boom
had caused vacancy rates to climb to a high of 14% in the
CBD and 22% in the suburban markets/beltline, leaving a
total of +/-9,000,000 SF vacant in 2009. 2011 has proven
to be an exceptional recovery year for the market with the
absorption of over 2,000,000 SF. Buoyed by high oil prices
and reduced rental rates, office absorption has now eclipsed
3,000,000 SF in the last 24 months and shows no signs of
easing.
There is approximately 32,000,000 SF of retail premises in
Calgary, boasting a vacancy rate of approximately 5%. New
construction underway equals approximately 300,000 SF
with another 200,000 SF of new construction anticipated
over the next six months. Significant news in the retail sector
includes; the acquisition of Zellers by Target, acquisition
of Sport Chek by Canadian Tire and the emergence of
American retailers such as Five Guys Burger and Fries,
Buffalo Wild Wings and the potential for more including
Nordstrom’s, Walgreen’s and Big Lots Inc.
Calgary’s industrial market has been relatively stable over
the past several years with vacancy rates steadily decreasing
to just over 4%. With minimal new developments
commenced, it is forecasted that vacancy rates will continue
to decline and rental rates will increase. Average rental rates
for space start at $6/SF for larger areas and increases to
$9 to $10/SF for smaller areas. The industrial market
consists of +/-110,000,000 SF of space with +/- 2,000,000
SF planned for construction within the next 12 month.
Calgary’s outlook is extremely positive and poised for strong
growth in the coming years, provided the Alberta Oilsands
remain a globally accepted source of oil. The outlook for
office, industrial and retail are all well balanced with land
supplies available, construction prices back in balance and
steady demand by all tenants across the board.
Contact
NAI Commercial Edmonton
+1 780 436 7410
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
3,855,100
2.7%
$1,632.89
$47,340.29
2.0%
7.5%
1.0%
34.493
Edmonton continues to expand with an influx of US retailers,
while the industrial and office markets, with historically low
vacancy rates, are dealing with tenant's global concerns and
their continued state of caution. $162 billion in projects have
been scheduled in Edmonton and Northern Alberta. Oil, Gas
and Oilsands projects make up 75% of this total. Edmonton
is a staging ground for the north.
The potential for growth is immensely supported by statistics,
such as in the month of June 2011 there were more jobs
created in Alberta than throughout the entire United States
(22,000 vs. 18,000). The Investment market has experienced
increased activity with mainly large scale transactions and
there continues to be limited availability of small investment
properties.
Edmonton’s first new office tower in 20 years opened this
past September. The first of four towers planned for the site,
Epcor Tower is a 30 story, 618,000 SF building, home to
Epcor, Capital Power and the Federal Department of Justice.
This ‘Epcor Effect’ has resulted in a reduction in lease rates
as landlords have become more competitive to offset the
increased inventory available. The suburban office market is
now under further pressure reducing rates as the increased
inventory/vacancy downtown will provide an incentive for
office tenants to relocate.
Edmonton’s retail market remains strong and has seen a
significant reduction to an already low vacancy. Target
has paid $1.8 billion to buy over 200 Canadian Zellers
department store’s leases. Big Lots Inc. purchased Liquidation
World Inc. for their first expansion outside of the US through
a network of 89 stores. American retailers Cabela’s Outfitters
and Lowe’s Home Improvement opened their first locations
in Edmonton.
Industrial buyers and tenants have few options to choose
from as market activity increases. Small lease bays are taken
up quickly and few availabilities present themselves for
50,000 SF plus users. Industrial Land has also seen an
increase in sales activity and a rebound in pricing. A sampling
of sales on parcels from one to five acres this year shows an
average price of $636,000 per acre versus $512,820 a year
prior. Whether you blog, tweet or read the headlines, current
real estate markets are viewed cautiously. If you consider the
strength in retail, our first new office tower in two decades
and the Oilsands projects, Edmonton remains a great market
to invest.
Calgary At A Glance
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
Solus Food Stores
CAD 30.00 CAD 40.00 $ 29.70 $ 39.60 2.50%
CAD 22.00 CAD 30.00 $ 21.78 $ 29.70 5.70%
CAD 12.00 CAD 22.00 $ 11.88 $ 21.78 10.60%
N/A N/A N/A N/A N/A
CAD 19.00 CAD 25.00 $ 18.81 $ 24.75 7.30%
CAD 10.00 CAD 19.00 $ 9.90 $ 18.81 12.50%
CAD 4.75 CAD 6.00 $ 4.70 $ 5.94 4.20%
CAD 5.25 CAD 10.00 $ 5.20 $ 9.90 4.00%
CAD 9.00 CAD 17.00 $ 8.91 $ 16.83 4.60%
CAD 5.00 CAD 50.00 $ 14.85 $ 49.50 5.40%
CAD 20.00 CAD 33.00 $ 19.80 $ 32.67 3.00%
CAD 16.00 CAD 36.00 $ 15.84 $ 35.64 2.80%
CAD 15.00 CAD160.00 $ 14.85 $ 158.42 4.20%
N/A N/A N/A N/A N/A
deVeloPment land low//acre High/acre low/acre High/acre
Office in CBD
CAD 4,500,000.00 CAD 13,000,000.00 $ 4,455,445.54 $ 12,871,287.13
Land in Office Parks
CAD 600,000.00 CAD 1,000,000.00 $ 594,059.41 $ 990,099.01
Land in Industrial Parks
Office/Industrial Land - Non-park
CAD
CAD
450,000.00 CAD
450,000.00 CAD
800,000.00 $ 445,544.55 $
800,000.00 $ 445,544.55 $
792,079.21
792,079.21
Retail/Commercial Land CAD 700,000.00 CAD 1,300,000.00 $ 693,069.31 $ 1,287,128.71
Residential
CAD 100,000.00 CAD 4,500,000.00 $ 99,009.90 $ 4,455,445.54
Edmonton At A Glance
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
Solus Food Stores
CAD 26.00 CAD 40.00 $ 25.74 $ 39.60 7.10%
CAD 20.00 CAD 28.00 $ 19.80 $ 27.72 7.10%
CAD 12.00 CAD 21.00 $ 11.88 $ 20.79 7.10%
CAD 22.00 CAD 27.00 $ 21.78 $ 26.73 7.10%
CAD 18.00 CAD 22.00 $ 17.82 $ 21.78 7.10%
CAD 12.00 CAD 18.00 $ 11.88 $ 17.82 7.10%
CAD 5.00 CAD 8.00 $ 4.95 $ 7.92 3.00%
CAD 6.25 CAD 10.50 $ 6.19 $ 10.40 3.00%
CAD 6.25 CAD 10.50 $ 6.19 $ 10.40 3.00%
CAD 18.00 CAD 37.00 $ 17.82 $ 36.63 1.80%
CAD 16.00 CAD 35.00 $ 15.84 $ 34.65 1.80%
CAD 24.00 CAD 40.00 $ 23.76 $ 39.60 1.80%
CAD 30.00 CAD 150.00 $ 29.70 $ 148.51 1.80%
N/A N/A N/A N/A N/A
deVeloPment land low//acre High/acre low/acre High/acre
Office in CBD
Land in Office Parks
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
CAD 200,000.00 CAD 550,000.00 $ 198,019.80
CAD 325,000.00 CAD 725,000.00 $ 321,782.18
CAD 400,000.00 CAD 1,200,000.00 $ 396,039.60
CAD 65,000.00 CAD 850,000.00 $ 64,356.44
$ 544,554.46
$ 717,821.78
$1,188,118.81
$ 841,584.16
2010 Global Market Report n www.naiglobal.com 44