EDMONTON – A new Avison Young report on the Edmonton industrial market shows the city continuing a streak of positive activity.
Edmonton recently marked its 14th consecutive quarter of positive absorption with 695,000 square feet absorbed and the introduction of 1.15 million square feet of new supply into the market. Of this new supply, 200,000 square feet was pre-leased, which had consequently no significant impact on the current quarter absorption, the report said.
The south/southeast and Niku submarkets had the most absorption with 493,000 square feet and 381,000 square feet being positively absorbed, respectively. The northwest part of the city saw negative absorption of 162,000 square feet, marked by a new 298,000 square foot vacancy and over half a million square feet of sublet space.
The city’s vacancy rate remained stable quarter-over-quarter at 4.4 per cent while surrounding municipalities saw an overall vacancy increase to 5.6 per cent, bringing the overall total for the city to 4.7 per cent.
“In Q4, six buildings were completed, with an additional six scheduled for delivery in 2024, anticipating the addition of 1,365,000 square feet of new supply. Notably, Panattoni achieved milestones in the southeast, completing two state-of-the-art projects, buildings one and two in Fulton Creek Business Park, spanning 151,000 and 267,000 square feet, respectively, both designed to be LEED certified,” the report said.
“The south market also welcomed the completion of industrial condos at Roper Crossing, adding 59,000 square feet to the market. In Nisku, Hopewell completed Building M at Border Business Park, a 481,000 square foot distribution warehouse representing nearly half of the new supply added to the Greater Edmonton market in Q4,” the report added.
Construction activity remains strong, the report said, with development pf three flex industrial buildings at Eastgate Crossing and K&H and Eagle Builders starting construction of The WIC, an industrial condo project scheduled for Q3 2024 delivery.
In the northwest, Skyline REIT and Camgill are constructing the fourth addition to Skyline Rampart Business Park, a 97,000 square foot warehouse and QuadReal anticipates delivery of Building 2B, a 254,000 square foot warehouse at Anthony Henday Business Park next quarter, the report said.
“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,” the report said.