Commercial property investment in Alberta exhibited considerable strength in Q4 2018, according to Altus Group’s latest analysis of activity in the province’s most important urban markets.
In Edmonton, combined activity for all of 2018 went up by 39% over 2017, with the apartment, industrial, and retail asset classes representing fully 62% of the city’s total dollar volume for the year.
The apartment market’s 83 transactions contributed $849 million to Edmonton’s 2018 total, haing grown by 69% year-over-year. Industrial saw 220 transactions valued at a total of $841 million, up 61% from 2017. Overall retail investment also shot up by 31% annually.
Edmonton’s office segment had 53 transactions with a total of $550 million in investment, increasing by 37% from 2017.
“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.”
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Meanwhile, Calgary enjoyed its third straight year of total investment growth with an annual total of $3.7 billion, but the Altus Group report warned that significant uncertainty remains.
Calgary’s office segment led in terms of value, with a total of $960 million (up by 21% annually) across 43 transactions. The industrial sector also saw its best year over the past decade, with 132 deals representing an investment total of $758 million.
Apartment activity increased by 8% last year, with the fourth quarter bringing in 68% of this volume. The ICI land market had a more generous 27% growth, while residential investment went up by 18%.
“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.”