Calgary commercial real estate sales top $4.8 billion in 2012

By Mario Toneguzzi, Calgary Herald

Photograph by: Ted Rhodes , Calgary Herald

CALGARY — The Greater Calgary real estate market accelerated its recovery from 2009, climbing by 81 per cent in terms of overall investment dollar volume in 2012 from the previous year, says a report by RealNet Canada.

The real estate information services company said there were 445 transactions over $1 million during the year totalling $4.84 billion.

“The strength of the recovery in the Calgary commercial real estate market accelerated greatly in 2012,” said Paul Richter, the director of research for RealNet Canada. “After lagging behind the recovery strength of other Canadian markets, Calgary has now also reached near-high levels of investments.”

RealNet said every commercial real estate sector, with the exception of hotels, saw year-over-year increases.

The office market gained by 45 per cent to $1.6 billion followed by residential land with a whopping 349 per cent hike to $770.7 million and retail which grew by 61 per cent to $724.3 million.

Other sectors with their dollar volume and percentage change from the year before were: industrial, $611.4 million, 36 per cent; apartment, $468.4 million, 254 per cent; industrial land, $564.7 million, 108 per cent.

The hotel sector dropped by one per cent to $83.7 million.

The investment market peaked in 2007 with sales totalling just over $5 billion.

According to a 2012 report by CBRE Limited: “The Calgary market has had an extremely active year in terms of both leasing and investment activity. Demand from a dynamic oil industry and a lack of quality space have spurred new construction which could satisfy the strong demand for space. As global demand for natural resources continues to increase, Calgary is expected to be further transformed into an international market.”

Recently, Calgary’s commercial real estate market was listed as the best one in Canada for total annual return on investment.

A report by the Real Property Association of Canada and Investment Property Databank Canada said Calgary had a return of 19.0 per cent in 2012 followed by Edmonton at 17.5 per cent and Winnipeg at 16.8 per cent. Total return for Canada was 14.1 per cent.

The IPD total return encompasses the change in property valuation net of capital expenditure plus net operating income divided by the capital invested.

The IPD’s global property index pegged total return on investment in Calgary in 2011 at 21.6 per cent, the best among 60 international cities surveyed, followed by San Diego, Calif. (19.5 per cent), Portland, Ore. (18.0 per cent) and Seattle, Wash. (17.7 per cent).


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