Alberta commercial investment continues to surge

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Commercial property investment in Alberta significantly grew in Q4 2018, largely fuelled by the province’s two most important markets, according to Altus Group’s latest analysis.

Calgary saw its third consecutive year of total investment growth, reaching an annual total of $3.7 billion. However, Altus Group warned that considerable uncertainty remains. 

“2018 saw increases in investment across all sectors when compared to the previous year, however this has not translated into the higher volumes seen in the past,” Tatterton explained.

“What it has demonstrated is that the market is continuing along a path of recovery, and until some of the uncertainty surrounding the greater economy is resolved, it is likely that 2019 will follow a similar path as 2018.”

Calgary’s office segment helped propel the market to its stellar performance, with its 21% annual increase in investment value to reach $960 million. The industrial sector also experienced its best year over the past decade, with 132 deals representing an investment total of $758 million.

The city’s apartment investment also grew by 8% last year, with Q4 accounting for 68% of this volume. The ICI land market had a 27% increase, while residential investment went up by 18%.

Meanwhile, Edmonton’s commercial activity for 2018 went up by 39% over 2017, with the apartment, industrial, and retail asset classes representing 62% of the city’s investment volume for the year.

“The annual results indicate a significant improvement over the previous year,” Altus Group data solutions manager Ben Tatterton said.

“However, it should be noted that one large transaction in the office sector and several apartment sales that were agreed upon at a prior date, bolstered the totals seen in 2018. Nevertheless, the interest in the market from various types of purchasers seen through 2018 is a positive note, and will probably continue in 2019.”

The apartment market represented $849 million in Edmonton’s 2018 total, growing by 69% annually. Industrial investment was valued at a total of $841 million, up 61% from 2017. Overall retail activity also shot up by 31% year-over-year.

Edmonton’s office segment accounted for $550 million in investment, increasing by 37% from 2017.

by Ephraim Vecina – Canadian Real Estate Wealth