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Calgary’s Industrial Sector Posts Record Quarter While Other Sectors Lag

Q1 2019 registered a total of 122 sales transactions over $1 million, representing a total value of $804 million, an increase of 18% in sales compared to a year ago

CALGARY ‒ Altus Group, a leading provider of software, data solutions and independent advisory services to the commercial real estate industry, today announced the results for commercial real estate investment in the Calgary market area for Q1 2019. Q1 saw 122 sales transactions, totalling $804 million, an 18% increase from Q1 2018. Investment volumes in the first quarter of the year are lower than the last three quarters of 2018.

Overall cap rates for Calgary increased moderately in Q1 according to the Altus Group Investment Trends Survey. Contrary to other top-tier markets, where high demand for good quality assets is putting downward pressure on cap rates, investment activity in Calgary appears to be driven by investors searching for higher yields in an environment of depressed prices.

 

Graph showing total $ volume of Calgary property transactions for all sectors by quarter.

(Calgary Property Transactions – All Sectors by Year)

Investor confidence in the industrial sector was evident with a record setting quarter for transactional volume. Overall 28 transactions representing $287 million in value traded hands in Q1, a 21% increase from Q4 2018, and a 156% increase from the same quarter last year. Industrial has been on an upward trajectory for the past four quarters, and historically has only surpassed the $250 million mark two other times in the past 10 years. Three notable transactions occurred in Q1:

  1. 6075 86th Avenue, 6060 90th Avenue, and 8801 60th Street S.E. acquired by Summit Industrial REIT for $79,550,000
  2. A 622,754 square foot, three building portfolio acquired by Triovest from HOOPP Realty for $77,175,000
  3. 285188 Frontier Road acquired for $61,000,000 by RCG Group

Q1 2019 has been consistent with results seen through 2018 for the retail sector. According to the Altus Group Investment Trends Survey, retail cap rates have increased from the previous quarter and are projected to continue increasing. Q1 saw 16 transactions worth $121 million, up 6% from the previous quarter, and up 20% from the same quarter last year.

Down 4% from the same quarter last year, Calgary’s office sector saw 8 transactions worth $81 million. Soft demand and the lack of any large purchases by either institutional buyers or private capital in Q1 has office volumes at the lowest point in the past four quarters. Meanwhile, another asset class that struggled in 2018, the apartment sector, got off to a strong start in Q1 with 20 transactions worth $121 million, a 357% jump from the same time last year.

Residential and ICI land were both down compared to the same quarter last year by 62% and 40% respectively.

 

Pie chart showing total dollar volume of Q1 2019 Calgary property transactions by sector

 

(Calgary Q1 2019 Property Transactions – Total $ Volume by Sector)

“The industrial sector continues to capture a larger share of the commercial investment market in Calgary, as several other asset classes are struggling to find consistency,” noted Ben Tatterton, Manager, Data Solutions at Altus Group.

 

ABOUT DATA SOLUTIONS

Data Solutions connects the Canadian real estate industry through the delivery of data with unparalleled breadth, integrity and relevance.  We cover new homes, investment transactions and commercial market inventory in key markets, and also provide intelligence on the national housing market and consumer home buying and borrowing patterns.

Our solutions are used by real estate industry stakeholders to gain market intelligence, identify and validate opportunities, benchmark, strategically plan, manage risk and more.

Data Solutions is part of Altus Analytics, the software and data solutions business of Altus Group, where our focus is to empower real estate clients and partners to work collaboratively to enhance decision making, drive performance and optimize transactional efficiency. Our solutions enable firms to better organize and manage data and connect with the right information and analytics to help them gain a complete picture of real estate assets, portfolios and transactions.

For more information on Data Solutions, please visit www.altusgroup.com/datasolutions.

 

ABOUT ALTUS GROUP LIMITED

Altus Group Limited is a leading provider of independent advisory services, software and data solutions to the global commercial real estate industry. Our businesses, Altus Analytics and Altus Expert Services, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,500 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest real estate industry participants across a variety of sectors.  Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the TSX under the symbol AIF.

For more information on Altus Group, please visit: www.altusgroup.com.

 

FOR FURTHER INFORMATION PLEASE CONTACT:

Elizabeth Lambe
Manager, Communications
Altus Group
(416) 641 – 9787
elizabeth.lambe@altusgroup.com