According to Statistics Canada, non-residential building construction in Alberta moved up almost 2% in the second quarter of 2012 to $2.2 billion, much of which is contributed to growth in Edmonton. Calgary has hogged the headlines for a long time but is now clearly regarded as one of the most expensive markets in the world.
The economy may be great, growth in Calgary may be sustainable, and demand is likely to continue, but investors looking for real growth opportunities and longer term security are increasingly turning to Edmonton to invest in commercial real estate. Edmonton's office vacancy rates have been dropping steadily as more businesses choose to set up shop here, or even relocate back to Edmonton from Calgary.
According to recent stats, rental rates on the most attractive buildings have been rising sharply, heading up from $25 to $29 while incentives have dropped off. This isn't a trend likely to change either, according to analysts.
However, if the office market is doing well, retail is doing even better with vacancy rates at historic lows, and retail sales outpacing the national average by 25%. It is these high sales figures and affordability of space compared to Calgary that is making Edmonton the focus of brands from all over the globe looking to move in. The combination of high sales, low vacancy rates and rising rents, with continued demand and availability of financing is fueling more investment in construction in Edmonton, but builders still can't keep up and are reporting that they are leasing out retail units in a third of the time expected, and even 3 years ahead of schedule.
Yes, Edmonton is already home to North America's biggest shopping mall, but as migration and population growth continues to blossom and new homes are bought up and wages grow, many of the best returns can be found on smaller, local shopping plazas and strip malls. Think about the stores you frequent the most, and what people spend the most time buying and which stores benefit the most when things are good and when they drift, it isn't always the richest and most luxurious brands but the every day retailers.