Calgary’s first speculative industrial development since 2015 is a sign of increasing confidence in the city’s commercial market according to a leading agent.
The 400,000 square foot facility in Balzac is being co-developed by Bentall Kennedy and Highfield Investment Group and the property is being marketed by CBRE Canada.
“This is a real statement of confidence in the long-term vitality of the Calgary market,” commented Iain Ferguson, EVP of CBRE Canada. “In recent years, the Calgary industrial market has grappled with the challenge of large amounts of new supply being delivered at the same time when tenants became increasingly hesitant to move due to the oil and gas downturn. However, tenant activity has roared back in Q2 2017 with absorption, the commercial real estate industries’ measure of tenant demand, back to levels consistent to the pre-downturn era.”
Ferguson says that continued economic recovery should drive tenant demand for 2017 and 2018.
The new High Plains development comes as the city’s availability rate is predicted to dip below 7% CBRE forecasts and Adrian Monro, president of Highfield Investments is confident that the demand will be there.
“Our decision to speculatively build such a large facility in Balzac is twofold … it reflects our confidence in the long-term outlook of the Greater Calgary Area market. Secondly, Calgary continues to evolve as a leading logistics hub in Western Canada with the effect of e-commerce driving this evolution. From 2018 onwards, we believe there will be a dearth of available buildings that meet the specialized requirements of retailers growing e-commerce fulfillment needs.”
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