- What Sale activity is in on the rise in Calgary’s industrial market, Avison Young said in a new report
- Why Lower interest rates are spurring activity from buyers and sellers
- What next The trend is expected to continue into 2025
Demand for small and mid-bay industrial properties is growing in the Calgary area, Avison Young said in a Q3 report.
Through the third quarter, there were 126 industrial sales totalling $394m and 109 land sales valued at $442m.
Lowered interest rates are keeping the market active and generating new interest in Calgary industrial properties. Sellers are able to capture premiums amid rising rental rates, the brokerage said, and buyers are able to lock in less expensive debt.
“A boost to sale activity is anticipated in Q4 and continuing into 2025,” Avison Young said.
Major transactions included the sale of 8700 Venture Avenue SE in July for $18m, or $200/sq ft, and the $16.2m, or $151/sq ft, sale of 122686 48 Street SE to a numbered company by Sun Life.
The activity comes despite a 0.2% quarter-over-quarter uptick in the total vacancy rate to 4.7%. The rate is up 1.7% compared with the year-ago third quarter.
AY said the increase in vacancy rates was mostly due to new developments, with the southeast part of the city seeing the most new construction and highest vacancy rates. Vacancy in that part of Calgary now sits at 5.5%, with the Balzac area at 5.8%.
But absorption over the last year has “remained strong,” AY said, hitting 2.9m sq ft.
The brokerage said substantial new supply came online in the quarter, and 40% of it was preleased. About 1.8m sq ft of inventory is under construction, with about half preleased.
The vacancy rate will stabilize as the new space is leased up, AY said.
