Edmonton has seen a substantial increase in market activity throughout Q2 2022. Most notably is the recent deal with Panattoni and MTE Logistix for 548,124 sf in Apex Business Park, completed by the team at Avison Young. This growth, by a long-standing Edmonton based company, demonstrates the strength and depth of the greater Edmonton Industrial market. On the heels of the MTE and other significant lease deals, confidence in our market continues to grow, resulting in developers and landlords investing further in the Edmonton market. The result will be an additional new inventory of modern distribution space to fulfill increasing demand. Notable new development announcements include 423,481sf in the Anthony Henday Business Park, 321,055 sf at Northport Business Park, and an upcoming announcement of what will be constructed at Panattoni’s Fulton Creek Business Park.
With vacancy rates compressing, we expect to see a continued increase in deal velocity and interest in the new buildings that are either under construction or will be under construction in the coming months. Alberta is also attracting the attention of major markets experiencing record low land availability with escalating prices; acting as an affordable alternative for some. In other market news, Oxford Properties is set to list their CityView Business Park for sale. The Park contains approximately 1.5m sf across 16 buildings, with an overall average vacancy rate of 8.4% at the time of recording. This would constitute one of the largest industrial building sale transactions in Edmonton.
Of interest heading into Q3 and Q4 will be the impact of inflation and rising interest rates on the economy. While this impact is undeniable, Alberta is doing well under the conditions. The unemployment rate sits at its lowest point since 2015, demand for responsibly sourced oil amidst Russian energy boycotts is adding security to the energy sector, and housing construction starts have rebounded to levels last seen in 2015. These are just a few indicators reflecting Alberta’s reality. While it isn’t possible to know what the economy will do short-term, we anticipate the industrial market to remain active and look to the current demand to support the coming inventory of space that is ready to support a growing distribution/logistics market.