Edmonton Investment Transaction Stats – Q4 2017
Strong Gains in Overall Investment in the Edmonton Commercial Real Estate Market in 2017
The Edmonton Market Area registered 745 transactions, in excess of $500k, for a total investment value of nearly $2.9 billion in 2017
EDMONTON ‒ Altus Group, a leading provider of commercial real estate services, software and data solutions, today announced the Edmonton market area’s cumulative commercial real estate investment results for 2017. In total, 745 transactions over $500,000 were captured, worth nearly $2.9 billion. This represents a 25% increase from the previous year. Investment volume is likely to grow marginally in 2018, according to Altus Group’s Investment Trends Survey, and the sentiment from investors indicates that for the most part, cap rates have compressed slightly over the year.
Source: Altus Group
Investment activity in 2017 was generated in near equal parts from the apartment, industrial, office, retail and ICI land sectors. Contributions ranged from 15 to 20% per asset class; $426.3 million (office) to $586.6 million (retail). The two outliers, hotel and residential land, contributed $98.7 million and $240 million, respectively.
Capital flow in the office market was up nearly 200%, due mainly to Dream Office REIT’s disposition of 13 office assets mostly in the downtown core as well as two suburban markets, for $187 million. Nine of the properties sold to KingSett Capital, all of which are located in the Sherwood Park area. AIMCo invested $60 million in two downtown properties, Enbridge Place and HSBC Bank Place, while the balance of the portfolio was acquired by local private investors.
The ICE District development includes two office towers, Edmonton Tower and Stantec Tower. Each was almost entirely pre-leased with only the Stantec Tower remaining under construction. These towers, along with the downtown mall Edmonton City Centre are understood to be on the market, and generating considerable interest.
Retail transactions increased by 13% in year-over-year investment to $586.6 million. Top transactions included the City of Edmonton acquiring MacEwen University, a unique property type that we code as retail, for $36 million, as well as the sale of multiple neighbourhood shopping centres located in suburban markets, each near the ring road, Anthony Henday Drive and acquired by local private investors.
The apartment market outperformed 2016 by 73%, due to the sale of Edgewater Village, a purpose built rental complex consisting of four buildings, including two towers, and a total of 694 units. The property was developed by Regency Developments and acquired by Greystone and Timbercreek, for a total consideration of $191 million.
The industrial sector recorded 165 transactions, the most active improved asset class in terms of number of deals in the Edmonton market, totalling $519 million. Overall investment was down 14% from the previous year; however investment in 2016 had rebounded by 47% from 2015. Acquisitions in the industrial market were primarily acquired by end users, with the exception of higher quality, multi-tenant assets that were mainly traded between private investors.
“2017 was a year of significant opportunity for investors to enter the market or build on their existing portfolio. Movement in the downtown office market will continue as tenants shuffle space into newer buildings, while current landlords may investigate the opportunity to dispose of key assets given the market’s appetite for those that came to market in 2017,” noted Paul Richter, Director, Data Solutions at Altus Group.
ABOUT DATA SOLUTIONS
Data Solutions connects the Canadian real estate industry through the delivery of data with unparalleled breadth, integrity and relevance. We cover new homes, investment transactions and commercial market inventory in key markets, and also provide intelligence on the national housing market and consumer home buying and borrowing patterns.
Our solutions are used by real estate industry stakeholders to gain market intelligence, identify and validate opportunities, benchmark, strategically plan, manage risk and more.
Data Solutions is part of Altus Analytics, the software and data solutions business of Altus Group, where our focus is to empower real estate clients and partners to work collaboratively to enhance decision making, drive performance and optimize transactional efficiency. Our solutions enable firms to better organize and manage data and connect with the right information and analytics to help them gain a complete picture of real estate assets, portfolios and transactions.
For more information on Data Solutions, please visit www.altusgroup.com/datasolutions.
ABOUT ALTUS GROUP LIMITED
Altus Group Limited is a leading provider of independent advisory services, software and data solutions to the global commercial real estate industry. Our businesses, Altus Analytics and Altus Expert Services, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,500 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest real estate industry participants across a variety of sectors. Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the TSX under the symbol AIF.
For more information on Altus Group, please visit: www.altusgroup.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
(416) 641 – 9787