Image of tall office buildings in a downtown, looking up from a position on the sidewalk below.

Apartment and Industrial Sectors Drive Q1 Numbers in Edmonton

179 transactions over $500,000 were registered in Q1 2019, representing a total investment value of $706 million down 12% compared to a year ago

The strongest performers of the quarter were the industrial and apartment sectors, which captured 52.2% of the market. According to the Altus Group Investment Trends Survey, investors remain particularly confident in industrial assets. With the continued expansion of e-commerce and cannabis production, along with an active end-user segment of the market, it is expected that the demand for industrial product will continue to be strong through 2019. Apartment cap rates in Edmonton are trending downwards due to limited product. Investors continue to look for stable returns and buying opportunities in both the core and suburbs of Edmonton.

 

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

(Edmonton Property Transactions – All Sectors by Quarter)

Q1 2019 saw 50 industrial transactions, representing a total investment value of $185 million, a 24% decrease from Q4 of 2018, and a 6% decrease from Q1 2018. Deal velocity has been consistent over the past year with an average of 55 deals per quarter.

The apartment sector had 22 transactions worth a total of $183 million. The two top transactions in the apartment category were Portofino Suites and Delton Townhomes. Portofino Suites is a recently built, four storey, mid-rise apartment located in the suburb of MacEwan. It was acquired by Skyline REIT for $55,856,213. Delton Townhomes is a collection of 58 townhome buildings located in the established community of Killarney and was acquired by Avenue Living for a total price of $43,500,000.

The office sector recorded 23 transactions for a total of $57 million. While this is an increase of 134% over Q1 of 2018, that quarter was lowest total for office in the past two years. The lack of any large purchases by either institutional buyers or private capital in Q1 has meant that the office sector is continuing a path of low sales volumes to start off the year.

The retail sector also dropped in Q1 with 30 sales accounting for $87 million, a 57% decrease from the same quarter last year. This is the first time the retail sector has not surpassed the $100 million mark since Q2 2016.

Momentum slowed in the ICI land sector with 33 sales totalling $85 million, a 58% drop from Q1 of 2018. In contrast, residential land was up 43% from last year with 20 sales worth a total of $105 million.

“The bulk of this quarter’s activity was shared by the industrial and apartment markets, and with the long term investment projections favouring these two asset classes, it appears that this trend is likely to continue in 2019,” 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