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.
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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.
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