NAI Advent – Calgary Spring 2024 Market Report
Spring 2024 Calgary Commercial Real Estate Market Report
Alberta continues to stand out with its strong economic performance. The province is projecting a GDP growth of 2.3% for the fourth consecutive year, reinforcing its position at the top of provincial growth charts. Key drivers include significant investments in healthcare and education, coupled with the ever-crucial oil and gas sector, which is expected to generate 24% of provincial revenue. The completion of the Trans Mountain Pipeline (TMX) extension, set for mid-2024, will further increase Alberta’s export capacity, promising a strong economic outlook despite global uncertainties.
Industrial Market: Resilience and Expansion
Calgary’s industrial sector remains a beacon of resilience, with a vacancy rate of just 2.7%. The city’s strategic location as a transportation and logistics hub continues to attract diverse industries, from technology to manufacturing. This diversification has helped mitigate the volatility traditionally associated with the energy sector. As large-scale distribution facilities rise, the demand for smaller industrial spaces remains high, driving up rental rates and tightening vacancy rates for mid-size properties.
Retail Market: Optimism Amid Growth
The retail sector in Calgary is thriving, driven by a surge in population and consumer demand. The market’s resilience is evident as retailers and consumers adapt to post-pandemic realities, fostering a robust environment for retail investors. With an influx of new residents and continued economic growth, the retail landscape in Calgary is poised for further expansion and profitability.
Downtown and Suburban Office Markets: Shifts and Stability
Calgary’s downtown office market has maintained relative stability. Major moves, such as Canadian Natural Resources Ltd.’s relocation, are set to create new opportunities for high-demand office spaces. However, the high cost of construction and leasehold improvements remains a challenge for tenants. In the suburban office market, positive absorption trends continue, particularly in the northwest and northeast regions. Proximity to residential areas and premium Class A spaces are driving demand, signaling a shift towards higher quality office environments.
Multi-Family Market: Surging Demand and Rising Rents
Calgary’s multi-family sector is booming, fueled by unprecedented population growth. The vacancy rate for purpose-built rental apartments has dropped to 1.4%, the lowest in a decade, as new residents flood into the city. Average rental rates have seen significant increases, reflecting the high demand for housing. With numerous new projects in the pipeline, the market is well-positioned to meet this demand, though challenges in affordability and supply remain.
For a detailed analysis and further insights on the current state of the Calgary Commercial Real Estate Market, download our full Spring 2024 Market Report Here: