Q4. 2014 – Industrial - Cushman and Wakefield Edmonton

MARKETBEAT
INDUSTRIAL SNAPSHOT
EDMONTON, ALBERTA
Q4 2014
A Cushman & Wakefield Alliance Research Publication
STATS ON THE GO
Q4 2013
Overall Vacancy
Net Asking Rents (psf/yr)
2.5%
0.9pp
$11.00
15.3%
12 MONTH
FORECAST
6.0%
$8.00
4.0%
$6.00
$4.00
2.0%
$2.00
$0.00
0.0%
2009
2010
2011
OVERALL NET RENTAL RATE
2012
2013
2014
DIRECT VACANCY RATE
NEW SUPPLY
2.5
1.5
0.7
2009
2010
2011
2012
1.0
1.2
0.5
2.0
1.0
0.7
msf
2.0
0.0
Leading into 2015, the Edmonton Area will be faced with some
challenges. Acknowledging this area’s growth has been founded on
the success of the oil and gas industry, many businesses will be
adjusting their strategies to account for lower oil prices. Slower
economic growth will be apparent in Edmonton, in the near term, as
the market adapts. Accompanied with approximately 3 msf of new
supply coming online in late 2015, the question that bears to be
asked, “who will fill the space?” Land values are expected to remain
at current levels, which will leave construction and labour cost
reductions as a main focus for costs savings in future developments.
Cushman & Wakefield Edmonton
TD Tower
10088 – 102 Avenue, Suite 2700
Edmonton, Alberta T5J 2Z1
www.cushmanwakefield.com/knowledge
3.4%
$9.54
$10.00
Edmonton and surrounding area saw high volumes of industrial
transactions throughout Q4. The optimism was carried right through
to the end of December, even though oil prices dropped continually
throughout the quarter. The overall vacancy rate was almost a full
percentage point lower than one year ago, at 2.4%. With available
space increasing by only 78,000 square feet (sf) this quarter,
competition was high as businesses vied for limited space.
OUTLOOK
Y-O-Y
CHANGE
OVERALL NET RENTAL RATES VS. VACANCY RATES
MARKET OVERVIEW
Net asking rates were up 15.3% versus one year ago. The highest net
asking rates continue to be in Leduc/Nisku, as businesses see this
market as prime location. Other locations have seen a slight increase
in rental rates and vacancy. The total new supply added in 2014
accumulated to just over 1.1 million square feet (msf) of industrial
space.
Q4 2014
1.5
Alberta’s economic performance has remained
strong in the last quarter of 2014 despite the
fall of oil prices. The continuing strength of the
provincial economy can be attributed to the
capital already committed in the oil sands and
other major projects throughout the province. Agri-food exporters
have also contributed to the economic growth in Alberta, as the
weaker Canadian Dollar is working in their favour. Alberta closed the
year with a real GDP growth of 3.4%. The inflation rate in the
province dropped from 3% to 2% in November 2014, while the
unemployment rate remained steady at 4.5% in the fourth quarter of
2014. An interesting statistic came from the Labour Force Survey, it
recorded 5,700 new jobs in Alberta during December. This number is
consistent with the monthly average over the year.
psf/yr
ECONOMIC OVERVIEW
For more information, contact:
Cushman & Wakefield Industrial
780 420 1177
[email protected]
2013
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 2015 Cushman & Wakefield, Inc. All rights reserved.
2014
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EDMONTON, AB
SUBMARKET
INVENTORY
OVERALL
VACANCY
RATE
UNDER
CONSTRUCTION
YTD
CONSTRUCTION
COMPLETIONS
WTD.AVG
NET
RENTAL RATE*
WTD. AVG
ADDTIONAL
RATE*
46,564,758
3.1%
2,516,654
383,273
$9.75
$4.05
WTD. AVG
GROSS
RATE*
$14.00
1,285,000
3.3%
0
0
$7.45
$4.05
$12.00
44,328,950
2.5%
471,930
622,870
$10.80
$4.05
$15.00
Central
5,960,000
1.3%
0
0
$12.10
$4.05
$16.15
Leduc/Nisku
9,019,707
3.6%
0
131,000
$17.40
$3.75
$21.00
Acheson
2,560,000
1.0%
0
0
$14.25
$3.75
$16.25
109,718,415
2.5%
2,988,584
1,137,143
$3.95
$15.73
Northwest (Incl. St. Albert)
Northeast
Southeast (Incl. Sherwood Park)
TOTALS
$11.0
* RENTAL RATES REFLECT ASKING $PSF/YEAR
MARKET HIGHLIGHTS
SIGNIFICANT Q4 2014 LEASE TRANSACTIONS
SUBMARKET
TENANT
PROPERTY TYPE
Windfield Distribution Park
Northwest
MTE Logistix Edmonton
Office/Warehouse
120,300
McKenzie IV Building
Northwest
Victaulic Company of Canada Limited
Office/Warehouse
42,042
Rampart Business Park
Northwest
Husqvarna Canada Corp.
Office/Warehouse
55,000
Rampart Business Park
Northwest
Highland Moving and Storage
Office/Warehouse
33,000
SIGNIFICANT Q4 2014 SALE TRANSACTIONS
SUBMARKET
BUYER
PURCHASE PRICE / $PSF
11641 151 St
Northwest
Edmonton Light Industrial Portfolio Inc.
$46,775,000 / $136.00/sf.
343,928
17204 114 Ave
Northwest
West Thorn Realty Inc
$13,200,000 / $126.26/sf.
104,547
17505/52 105 Ave
Northwest
Saunders Properties Limited
$4,515,000 / $107.42/sf.
42,031
SIGNIFICANT Q4 2014 CONSTRUCTION
COMPLETIONS
SUBMARKET
DEVELOPER
COMPLETION DATE
51st Avenue Business Centre
Southeast
GWL
4Q14
SIGNIFICANT PROJECTS UNDER
CONSTRUCTION
SUBMARKET
DEVELOPER
COMPLETION DATE
City View Building 8
Southeast
Oxford
2Q15
99,000
City View Building 10
Southeast
Oxford
2Q15
99,000
City View Building 12
Southeast
Oxford
2Q15
94,500
Sunwapta Building A
Northwest
WAM
2Q15
106,000
Sunwapta Building B
Northwest
WAM
2Q15
211,000
Sunwapta Building C
Northwest
WAM
2Q15
90,000
Cornerstone Building C
Southeast
Hopewell
3Q15
179,430
Northport Building A
Northwest
Oxford
3Q15
175,560
Northport Building B
Northwest
Oxford
3Q15
231,420
Northwest Business Park 7B
Northwest
WAM
3Q 15
231,000
Horizon Building B
Northwest
Hopewell
3Q15
270,228
Horizon Building D
Northwest
Hopewell
3Q15
179,821
Henday Industrial Park Bldg 1
Northwest
WAM
3Q15
200,200
Henday Industrial Park Bldg 2
Northwest
WAM
3Q15
246,400
Henday Industrial Park Bldg 3
Northwest
WAM
3Q15
168,300
Yellowhead Crossing Phase II – Bldg 4
Northwest
Bentall Kennedy
3Q15
229,075
Yellowhead Crossing Phase II – Bldg 5
Northwest
Bentall Kennedy
4Q15
177,650
Cushman & Wakefield Edmonton
TD Tower
10088 – 102 Avenue, Suite 2700
Edmonton, Alberta T5J 2Z1
www.cushmanwakefield.com/knowledge
For more information, contact:
Cushman & Wakefield Industrial
780 420 1177
[email protected]
SQUARE FEET
SQUARE FEET
BUILDING SQUARE
FEET
78,000
BUILDING SQUARE
FEET
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 2015 Cushman & Wakefield, Inc. All rights reserved.
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