The market has seen at least three and a half years of positive absorption, says Avison Young
In a display of resilience and sustained desirability, the Edmonton industrial market posted its 14th straight quarter of positive absorption in Q4 2023, according to Avison Young.
The market saw the absorption of 695,000 square feet (sf), coupled with the introduction of 1,157,000 sf of new supply into the market, during the fourth quarter. Of the fresh supply, 200,000 sf was pre-leased, representing minimal impact on the Q4 absorption readings.
The South/Southeast and Nisku/Leduc submarkets led the region in absorption rate, at 493,000 sf and 381,000 sf, respectively.
Edmonton’s overall vacancy rate on a quarter-over-quarter basis remained stable at 4.4%, while surrounding municipalities reported a collective 70-basis-point increase. Avison Young said that this pushed Greater Edmonton’s overall vacancy rate up by 20 bp to 4.7%.
Central Edmonton saw a 150-basis-point drop in the vacancy rate, down to 3.7%.
“A prevalent theme over the past year has been uncertainty, with rising rates impacting costs and margins in construction and operation,” Avison Young said. “However, signs of stabilization are emerging, and uncertainties are subsiding.”
Looking for a reliable investment in Alberta? With an average rate of $12.59 per sf, Edmonton is one of the most affordable industrial markets compared to Vancouver, the #GTA & Ottawa. @CMPmagazine: https://t.co/7yzkoLDGWL #AYdifference
— Avison Young | Canada (@AY_Canada) September 12, 2023
Avison Young added that the pace of new development activity in Edmonton is showing no signs of deceleration, with six buildings completed in Q4 and an additional six slated for delivery in 2024. These are projected to add 1.365 million sf of new supply.
“Anticipating the Bank of Canada’s probable decrease in interest rates in the coming year, coupled with available land and cost advantages, we believe Edmonton’s industrial market is well-positioned for a robust 2024 as investments in industrial spaces continue, reinforcing the demand for top-class facilities,” Avison Young said.
