Edmonton Investment Transaction Stats – Q1 2019
Apartment and Industrial Sectors Drive Q1 Numbers in Edmonton
179 transactions over $500,000 were registered in Q1 2019, representing a total investment value of $706 million down 12% compared to a year ago
The strongest performers of the quarter were the industrial and apartment sectors, which captured 52.2% of the market. According to the Altus Group Investment Trends Survey, investors remain particularly confident in industrial assets. With the continued expansion of e-commerce and cannabis production, along with an active end-user segment of the market, it is expected that the demand for industrial product will continue to be strong through 2019. Apartment cap rates in Edmonton are trending downwards due to limited product. Investors continue to look for stable returns and buying opportunities in both the core and suburbs of Edmonton.
(Edmonton Property Transactions – All Sectors by Quarter)
Q1 2019 saw 50 industrial transactions, representing a total investment value of $185 million, a 24% decrease from Q4 of 2018, and a 6% decrease from Q1 2018. Deal velocity has been consistent over the past year with an average of 55 deals per quarter.
The apartment sector had 22 transactions worth a total of $183 million. The two top transactions in the apartment category were Portofino Suites and Delton Townhomes. Portofino Suites is a recently built, four storey, mid-rise apartment located in the suburb of MacEwan. It was acquired by Skyline REIT for $55,856,213. Delton Townhomes is a collection of 58 townhome buildings located in the established community of Killarney and was acquired by Avenue Living for a total price of $43,500,000.
The office sector recorded 23 transactions for a total of $57 million. While this is an increase of 134% over Q1 of 2018, that quarter was lowest total for office in the past two years. The lack of any large purchases by either institutional buyers or private capital in Q1 has meant that the office sector is continuing a path of low sales volumes to start off the year.
The retail sector also dropped in Q1 with 30 sales accounting for $87 million, a 57% decrease from the same quarter last year. This is the first time the retail sector has not surpassed the $100 million mark since Q2 2016.
Momentum slowed in the ICI land sector with 33 sales totalling $85 million, a 58% drop from Q1 of 2018. In contrast, residential land was up 43% from last year with 20 sales worth a total of $105 million.
“The bulk of this quarter’s activity was shared by the industrial and apartment markets, and with the long term investment projections favouring these two asset classes, it appears that this trend is likely to continue in 2019,” noted Ben Tatterton, Manager, Data Solutions at Altus Group.
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