Record High Activity: Calgary’s Industrial Real Estate Impresses
It’s not just residential real estate that is booming in Calgary - industrial real estate is also having it’s “moment”! Following a COVID-19 pandemic boost, Calgary's industrial real estate market is experiencing record-high activity, which will eventually result in greater job prospects for residents and a rising tax base for the city. This sharp increase in e-commerce activity and warehouse space demand will drive down vacancy rates throughout the country.
As we go into the fourth quarter of 2022, the demand for industrial space is expected to keep rising as retailers practice a "just in case" inventory strategy and look for additional space to store more goods due to supply chain issues on a global scale.
That’s not all!!
In addition, Calgary offers wholesalers and retailers a welcome option when markets like Vancouver and Toronto suffer from a severe lack of industrial products, with record-low vacancy rates of 0.4% and 0.7%, respectively, in Q1 2022.
Also, major multinational corporations such as Amazon, Lowe's, Home Depot, Canadian Tire, and Walmart have established distribution centers in Calgary over the past few years. This is a flashing green light as major, international companies are beginning to see the numerous benefits of investing in Calgary.
If that is not sufficient proof that Calgary’s industrial market is undoubtedly impressive, there’s even more so sit back, relax and read on!
According to recent data, the city has approximately 3.5 million square feet of vacancy, reflecting a 1.5% vacancy rate for industrial land. It’s vacancy rate and location make it a desirable alternative for businesses looking for space outside already developed markets like Toronto, Vancouver and Montreal.
Oil and gas historically dominated Calgary's industrial market. But now there is a shift to other sectors, like e-commerce, green technologies, logistics, and even financial products. The city benefits from a broader tax base and additional job opportunities as investment in the area continues to increase (but still benefits HUGELY from the historic investment in Oil & Gas and the MASSIVE royalties it continues to pay).
Businesses can cut expenses and boost operational efficiency by opening distribution centers or moving operations to Calgary. In contrast to other regions, Calgary has level topography and soil types conducive to development. The abundance of development areas available for firms to expand their operations offers long-term expansion potential while maintaining relatively moderate development costs.
Calgary’s central location in Western Canada and easy access to an east-west and a north-south roadway axis is one of Calgary's distinguishing characteristics, which is advantageous for truckers and logistics users. It has the transportation infrastructure to fulfill the ever-increasing demand of over 50 million consumers, all of whom may be reached within 24 hours via land, rail, or air transportation.
Calgary’s industrial rental rates are FAR BELOW other major markets: Over the past quarter, JLL data showed that Calgary averaged $9.93/sf, compared to Toronto: $15.32/sf and Vancouver: $18.70/sf – people and business are looking for affordable options now more than ever
Calgary's economic narrative is changing. Businesses looking for industrial space find Calgary a desirable location because of the city's rising employment figures, low cost of living, and economic growth.
Investing in Calgary is a once-in-a-lifetime opportunity that I don’t know how long will last – once interest rates start going back down, I think that prices are going to SHOOT UP! This is the ideal time to be investing in real estate if you have been considering it and Calgary presents you with an opportunity to diversify and expand if you currently have a real estate portfolio.