There is no doubt that 2016 was a year of political unrest, both in North American and in Europe. Many investors are concerned about political instability and how this will affect the real estate market in Canada. However, current trends in the Calgary commercial real estate market show that there is much reason for optimism for investors.
Each year brings with it new challenges and 2017 will be no different. However, it seems that business is as usual in Alberta and to meet new the challenges, investors will have to continue to develop strategies to address risk and opportunity.
What is the Current Health of Calgary Commercial Real Estate Market?
Retail sector
In 2017, the current trends in the retail sector will continue to impact on the commercial retail market. This is regarded by many as the most volatile sector in the real estate markets.
The good news is that āhard assetsā will always be needed as many online retailers increase the number of physical stores that they have in major cities. For example, Costco has launched its first business centre store in Toronto. Also, Amazon is now challenging supermarkets with its line-free grocery stores.
Office sector
Currently, Calgary and Toronto are leading the way when it comes to new office developments. In fact, in the top ten most active office development markets in the U.S. and Canada, Calgary ranks number 6. The means that in 2017, investors can continue to see a healthy return on investment in office space if they can attract tenants.
The fact that Calgary, on average, has the youngest age of buildings of any Canadian city is a big factor in attracting investment. For example, many of the newest office buildings in Calgary already feature āsmart buildingā designs that are eco-friendly and more cost-efficient to run. Calgary also has its Plus 15 skywalk system which provides users with a vibrant retail experience.
However, an increase in office space vacancy in 2016 means that real estate investors will have to come up with new and innovative strategies to attract new tenants to the downtown area.
