MARKETBEAT - Cushman and Wakefield Edmonton
Transcription
MARKETBEAT - Cushman and Wakefield Edmonton
MARKETBEAT OFFICE SNAPSHOT EDMONTON, ALBERTA Q4 2014 A Cushman & Wakefield Research Publication Alberta remained strong in the last quarter of the year despite the fall of oil prices in the fourth quarter of 2014. This subdued effect can be attributed to the capital already invested in the oil sands projects. The agri-food exporters also contributed to the growth in Alberta, with a weaker Loonie 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 from the Labour Force Survey reported that 5,700 new jobs were created in Alberta during December. This number remains in line with the monthly average over the year. EDMONTON OFFICE ACTIVITY The citywide vacancy rate in Edmonton was 11.0% at the end of 2014, an increase from 9.2% in the previous year. This was particularly driven by the Suburban area, where an additional 500,000 square feet (sf) of new office space was constructed. The fourth quarter alone saw 109,389 sf of new space supplied. Two new office buildings were added in the fourth quarter: The first is a 50,000-sf building at184th Street in the Westend, of which Computronix will occupy fifty percent. The second building is the Amnor Professional Centre in Eastgate, where the landlord has leased half of the 59,389 sf of available office space. Downtown remained relatively stable in comparison, with a subtle increase in overall vacancy to 8.7% from 8.5%. Although there was little change in downtown vacancy, Enbridge made its long-awaited announcement to consolidate from six office buildings into two. The winners of their RFP are the Kelly Ramsay Building (309,000 sf), and Manulife Place (100,000 sf), which will be occupied in addition to the 80,000 sf that Enbridge currently leases in the building. The consolidation will take place in late 2016 with the completion of the Kelly Ramsay building. approximately 500,000 sf of trailing space in four buildings. Furthermore, the City of Edmonton will be vacating 150,000 sf at HSBC Bank Place and 128,000 sf at Scotia Place to relocate to their new building in early 2017. While construction has not yet begun on the 600,000-sf Stantec building, once constructed, it will add 340,000 sf of vacancy to the market in mid-2018. As new supply of office buildings come to market, landlords of older A and B class buildings are reinvesting significant resources to improve their product. The city of Edmonton has approved fifteen high rise residential towers for the downtown core. Combine this with the development of the Edmonton Arena District (EAD), and downtown is going to see a major transformation that will result in a dramatically improved and exciting skyline. STATS ON THE GO Q4 2013 Overall Vacancy Direct Asking Rents (psf/yr) YTD Absorption (sf) Y-O-Y CHANGE 9.2% 11.0% 1.8 pp $20.06 $19.18 -4.4% 123,847 111,567 (12,280) 12 MONTH FORECAST $40.00 10.0% $30.00 8.0% 6.0% $20.00 4.0% $10.00 2.0% 0.0% $0.00 2010 2011 2012 DIRECT GROSS RENTAL RATE 2013 2014 DIRECT VACANCY RATE NEW SUPPLY OUTLOOK For more information, contact: Cushman & Wakefield, Office Team +1 (780) 420 1177 [email protected] msf 0.8 While the projected 1.7 million square feet of new supply won’t be delivered to market until late 2016 through to mid-2018, the result is that many landlords are preparing for an exceedingly competitive market place, downward pressure on net rents and larger tenant inducements for renewals and new deals. Tenants on the other hand are feeling quite confident in their ability to leverage new construction, upcoming trailing vacancies, and the recent uncertainty in the economy given low oil prices to negotiate favourable lease terms. As an example, Enbridge’s consolidation will result in Cushman & Wakefield Edmonton Suite 2700, 10088 – 102 Avenue Edmonton, AB, T5J 2Z1 www.cwedm.com Q4 2014 DIRECT RENTAL VS. VACANCY RATES psf/yr ECONOMIC OVERVIEW 0.6 0.4 0.2 0.0 2010 2011 2012 2013 2014 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. 1 EDMONTON, ALBERTA SUBMARKET INVENTORY OVERALL VACANCY RATE Downtown 9,803,866 Government CENTRAL DISTRICT UNDER CONSTRUCTION YTD CONSTRUCTION COMPLETIONS CURRENT QUARTER ABSORPTION 11.9% DIRECT VACANCY RATE 10.1% YTD OVERALL OVERALL WTD. AVG ABSORPTION ALL CLASSES GROSS RENTAL RATE* (260,406) $38.84 DIRECT WTD. AVG. CLASS A GROSS RENTAL RATE* 1,104,000 0 (19,263) 5,859,905 3.3% 2.8% 0 0 (8,743) 20,680 $31.81 $32.74 15,663,771 8.7% 7.3% 1,104,000 0 (28,006) (239,726) $37.63 $42.31 $43.26 124th Street 1,595,866 19.0% 17.4% 0 0 9,067 (104,240) $31.78 $32.86 149th Street 1,165,190 11.8% 11.8% 0 0 36,678 35,3112 $26.91 $32.79 West End 1,918,365 11.7% 11.3% 0 140,000 50,024 192,093 $29.43 $41.41 Kingsway 655,120 8.0% 4.6% 0 0 (1,427) (2,760) $30.75 $36.34 Whyte Avenue 514,168 12.9% 12.7% 0 0 700 (23,478) $35.13 $36.07 2,972,460 15.0% 11.4% 165,000 90,000 (113,771) 90,758 $30.28 $30.71 705,462 17.7% 14.5% 0 118,800 (2,890) 44,019 $36.14 $36.14 1,320,694 14.7% 14.7% 0 149,389 34,854 119,789 $26.33 $38.19 10,847,325 14.3% 12.5% 165,000 498,189 13,325 351,293 $37.54 $33.71 26,511,096 11.0% 9.5% 1,269,000 498,189 (14,771) 111,567 $33.39 $37.54 Southside Summerside Eastgate SUBURBAN DISTRICT TOTALS * RENTAL RATES REFLECT ASKING $PSF/YEAR MARKET HIGHLIGHTS SIGNIFICANT Q4 2014 LEASE TRANSACTIONS SUBMARKET TENANT BUILDING CLASS Kelly Ramsay Financial Core Enbridge A 309,000 Manulife Place Financial Core Enbridge A 100,000 Nutana 1, 170 Street & 107 Avenue West End Bird Construction B 40,000 Nutana 2, 170 St. & 107 Ave West End Cybertech B 28,000 Limelight Building, 103 Ave. & 124 St. 124th Street Kennedy Architecture A 26,000 Parkwest Business Park West End NAIT B 14,000 Jasper Block, 105 St. & Jasper Ave Financial Core Jobber B 8,500 SIGNIFICANT Q4 2014 SALE TRANSACTIONS SUBMARKET BUYER PURCHASE PRICE / $PSF 9707 110 Street 124th Street HPWC 9707 110 Street GP Ltd $24,500,000/$183.95 41,382 10235 124 Street 124th Street 1482388 Alberta Ltd $6,880,000/$207.91 29,000 SIGNIFICANT Q4 2014 CONSTRUCTION COMPLETIONS Amnor Professional Building SUBMARKET MAJOR TENANT COMPLETION DATE Eastgate TBD Q4 2014 59,389 184 Street Building West End Computronix Q4 2014 50,000 SIGNIFICANT PROJECTS UNDER CONSTRUCTION Allendale Office Building SUBMARKET MAJOR TENANT COMPLETION DATE Southside Provincial Government Q1 2016 60,000 Commerce South Office Southside TBD Q2 2015 45,000 Allendale Professional Centre Southside Medical Q2 2015 60,000 Kelly Ramsay Financial Core Enbridge Q3 2016 550,000 City of Edmonton Financial Core City of Edmonton Q1 2017 554,000 SQUARE FEET SQUARE FEET BUILDING SQUARE FEET (% LEASED) BUILDING SQUARE FEET (% LEASED) * RENEWAL - NOT INCLUDED IN LEASING ACTIVITY STATISTICS Cushman & Wakefield Edmonton Suite 2700, 10088 – 102 Avenue Edmonton, AB, T5J 2Z1 www.cwedm.com For more information, contact: Cushman & Wakefield, Office Team +1 (780) 420 1177 [email protected] 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. 2