Against the backdrop of concerns about Canada’s economy and commercial property woes, attendees at the 2024 Edmonton Real Estate Forum were bullish on the city’s future heading into the summer.
The mood around the conference was positive. Many suggested the city could be on the cusp of one of its most robust upswings, bringing with it new residents and economic opportunities unlike the traditional boom-and-bust cycles endemic to cities reliant on the resource economy.
But panelists acknowledged there are still challenges for developers hoping to build in Edmonton.
Here are Green Street News’ top takeaways from the event:
“Keep Edmonton Weird”
The way Edmonton has evolved over the years should be embraced rather than changed, according to one panelist, and it starts with accepting the core for what it is.
Unlike most cities, which see their downtowns as the must-be place for commerce and entertainment, Edmonton’s growth has been on its outskirts. That has created a doughnut effect, with downtown as the hole in the middle.
But the city must shrug off suggestions its downtown needs to be like Toronto or Vancouver and continue to do its own thing, Rohit Gupta of Rohit Group of Cos. said.
Gupta urged the audience to continue growth around the city rather than worrying about whether the downtown is as vibrant as other centres.
“Let’s just be different, who cares?” he said. “Keep Edmonton weird.”
Alberta saw an influx of 200,000 new residents in 2023, and those who came to Edmonton are moving to the city to put down roots rather than just working there temporarily.
With the population growth, demand for industrial space is also expected to rise.
A unique need for industrial space
While the petrochemical industry continues to be a driving force in the region, newer endeavors like carbon sequestering and hydrogen plants have also been arriving in the market, bringing with them a need for new facilities. With such operations comes specialized facilities, giving Edmonton a unique industrial marketplace.
Rod Connop, executive vice president of industrial for Colliers, said the population growth combined with demand for unique industrial spaces on top of more traditional distributional spaces will create a stable environment.
“If they all come to fruition, the Edmonton industrial market’s just going to be ticking along,” Connop said. “We are ground zero for the service part of it.”
Edmonton could be poised for a boom unlike those in the past, which were tied tightly to the energy sector, he said.
The city is also expecting to see increased demand for distribution space as the airport adds a 2,000-acre international cargo handling hub.
Meanwhile, Canada’s northern port on the Pacific, Prince Rupert, also plans to expand its operations. Edmonton is a key destination for cargo from Asia. Those good are stored in distribution centres before going on to the U.S. and other parts of Canada.
Private capital expected to dominate
Panelists addressed a lack of institutional money in the Alberta and Canadian real estate markets, with family offices and other private investors predicted to be the economic drivers for real estate in the near to medium term.
Pension funds are staying out of the game amid economic uncertainty, higher interest rates and inflation, Dave Young, executive vice president and managing director of CBRE Canada, said.
Young called the trend a “Canadian phenomenon.” That said, opportunistic capital could shake loose some movement in the marketplace.
Retail sector healthy
Affordable lease rates and disposable income are contributing to a healthy retail sector in Edmonton.
New retailers coming into the market are vying for space, increasing the value of shopping centres, May Cuan of Omada Commercial said.
“It’s really competitive, and that is inching lease rates up,” Cuan said.
A big part of the push has been in the food sector, with everything from grocery stores to small restaurants vying for space.
Labour, red tape a concern for developers
While attendees and panelists were generally positive about the direction Edmonton is heading, there were also complaints about the time it takes for the permitting process for projects to be approved by the city.
Finding labour is also a top concern for developers. Concerns about productivity are leading some developers to take a simpler approach to building.
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