Industrial Real Estate Market in Calgary Going Strong

Posted by Alan Zunec on Tuesday, November 1st, 2011 at 7:35am.

Yes the global financial markets are iffy, as is the global economy in general. Yet Calgary is seeing nothing but improvement in its industrial real estate market. During the third quarter of 2010, the vacancy rate was 3.5 percent. During the last eight years, the highest vacancy rate was back in 2009’s forth quarter, a dismal 5.2 percent. The absolute lowest was in 2007’s fourth quarter, before the recession. That vacancy rate came in at 0.7 percent. These figures are courtesy of CB Richard Ellis Ltd.

Iain Ferguson, who is a senior VP with the firm, say some of the demand is being accentuated by the lack of supply. Large retailers are putting in mega distribution centres and space is getting tight. That lack of space is being felt across all of the asset classes.

But relief is on the way. Some 1.2 million square feet of prime industrial space is already under construction, with another 2.25 million scheduled to begin construction in 2012. Meanwhile, the CRBE predicts that Calgary’s vacancy rate will keep falling, with an expected 2.3 percent predicted by the end of 2012.

At present there is roughly 115.9 million square feet of industrial real estate in the Calgary area. Of that, 957,143 square feet have been absorbed just in 2011. Vacancy rates have been steadily falling. In July of this year, the rate was at 5.1 percent. As of October, the rate is 4.44 percent.

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