LETHBRIDGE, ALTA. — Lethbridge, Alta.’s prospects are looking up in 2024 according to a new Avison Young report.
The report anticipates a surge in investments this year after a slowdown in 2023 of investment transactions due to “economic headwinds and cautious market sentiment,” a release said.
“Buyers remain in our market, and the sales activity is there to prove it, although the mood around how and what to purchase may have changed. Investor sentiment plays such an impactful role in property transactions that, by accepting the market’s ‘new normal,’ we will see projects regain momentum in 2024,” said Avison Young managing director (Lethbridge office) Doug Mereska in a statement.
Considering a more practical valuation of an investment property over time, investors are factoring in steady rent growth, inflation and local economic growth.
“While high construction costs and increased interest rates have caused a slowdown in our market, we are starting to emerge from a holding period into one of new development,” Avison Young executive vice-president (Lethbridge office) Jeremy Roden said.
“Although average rental rates in Lethbridge are still slightly below other comparable markets, Avison Young expects to see steady rate growth in the future, with significantly higher asking rents for new builds,” the release said.
Multifamily housing has increased in demand, the release added, which will drive new development and a slowdown in new industrial real estate builds in 2023 “will become more apparent over the next year as demand catches up, driving asking rents and competition for space.”
Office vacancy has been declining because of non-traditional tenants utilizing partial office buildouts and land sales were strong towards the end of 2023 and have “significant growth potential” for investors in 2024 and beyond.
“We have seen heightened activity in land sales through the end of 2023. These investment developments are well positioned for future growth where they may transact to owner-users or be retained as built-to-suit revenue-generating properties with long-term or national tenants,” Roden said.
The full report can be viewed here.