Developers dust off plans as oil provinces prepare for an uptick in a commercial real estate market led by a “surprising” retail-sector surge.
Aside from new projects, there has been an uptick in investments, particularly in Calgary.
To the end of September 2016, a total of $1.3 billion had been transacted in Calgary commercial real estate, nearly eclipsing the $1.5 billion invested in all of 2015, according to Barclay Street Real Estate.
Retail is a big mover, spurred by an average of $6 billion a month in consumer spending, the second-highest among western Canadian cities.
“Calgary’s retail sector has demonstrated surprising staying-power,” Barclay Street noted in a third-quarter 2016 survey. During the first nine months of 2016, 40 retail properties were sold for a total of $315 million, the biggest being the $106 million purchase of Beacon Hill Shopping Centre by RioCan Real Estate Investment Trust, which is planning a large retail and residential redevelopment on the site.
Downtown at year-end, Calgary-based Triovest bought an old retail block on 7 Avenue SW, where it proposes a transformation into a chic new shopping stroll.
In October, the real estate arm of the Healthcare of Ontario Pension Plan bought a 50 per cent share in the 38-storey TransCanada Tower in downtown Calgary, despite a near record-high city office vacancy rate.
Days later, Vancouver-based Pure Industrial Real Estate Trust bought a portfolio of Alberta industrial buildings, mostly in Calgary, covering 1.2 million square feet of leasable space. This was part of the $353 million spent on Calgary industrial properties in the first three quarters of 2016, which exceeded the entire industrial investment in 2015.
Meanwhile, Vancouver-based Qualex-Landmark has broken ground on a new condominium tower that required the fourth-largest concrete pour in Calgary’s history. “Calgary has a great future,” said Mohammed Esfahani, a partner in Qualex-Landmark.