Edmonton Investment Transaction Stats – Q4 2019
A Record Quarter Closes Out an Otherwise Slow Year in Edmonton Commercial Real Estate
In total, 489 transactions were recorded, representing $3.3 billion of investment value, a 13% decrease in volume from 2018. Overall investment levels underperformed for each of the first three quarters of the year compared to the same period last year until Q4, which registered a record $1.7 billion in transactions, amounting to 53% of the annual sales total.
The 13% decrease in overall sales for the year was not unexpected as the province entered the year facing economic and political uncertainty with the continued struggles of the energy sector and elections at the provincial and federal levels. Additionally, provincial economic growth was forecast to slow in 2019, with growth in 2020 expected to improve. Investor sentiment towards the market has been tepid throughout the year, as demonstrated by Altus Group’s Q4 2019 Investment Trends Survey (ITS), which had several Edmonton asset classes trending downward on the buy/sell momentum ratio.
(Edmonton Property Transactions – All Sectors by Year)
The industrial and office asset classes benefitted from large investments and outperformed their results from 2018. The office market concluded the year with 33 transactions worth a total of $638 million, a 19% increase from the previous year. The largest transaction of the year was for the recently completed Stantec Tower, which was acquired by the German real estate fund Deka Immobilien for $517,500,000. Apart from this transaction, activity in the office market was negligible. The largest industrial transaction of the year occurred in Q4 and involved Summit Industrial Income REIT acquiring 37 properties across Alberta, 22 of which being in the Edmonton area, for a total value of $588 million, Overall, the industrial sector recorded 158 transactions, worth $892 million, a 5% increase from 2018.
(Edmonton 2019 Property Transactions – Total $ Volume by Sector)
The retail sector saw 76 transactions, representing a total value of $664 million, which is a 7% decrease from the previous year. The largest contributor to this total occurred in Q4 with LaSalle’s 50% acquisition of City Centre Mall, which is the first sale of an indoor enclosed shopping centre in Edmonton since 2013. ICI land and residential land saw decreases in sales volume of 16% and 13% respectively. The apartment sector saw 56 transactions, worth $407 million. This represents a 51% decrease from the previous year, however, with the previous year featuring a large portfolio transaction bolstering the total, the results seen in 2019 are more in line with the average annual total for apartment dating back to 2015.
“2019 saw some sporadic investment of large amounts of capital in the market. However, the year was more or less a continuation of the holding pattern seen throughout the recovery period for Alberta,” noted Ben Tatterton, Manager, Data Solutions at Altus Group.
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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.
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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.
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