The hard-hit Calgary industrial market is slowly recovering but serviced land prices remain far below the peak prices of two years ago,
During the third quarter of this year, leasing up of mostly large bay space drop the vacancy rate to 4.8 per cent, marking the third consecutive quarter that the vacancy rate has fallen, according to a survey by Colliers International.
Sales, however, remain sluggish. So far in 2010, 48 industrial properties have sold in Calgary, well below the 10-year average of 120 annual sales and below even 2009, when 67 properties were purchased. Of the sales to date this year, 13 have been investment buys, not owner-users.
Vacant industrial land prices have fallen from 10 per cent to 20 per cent from the 2008 peak. The average price for an acre of serviced land in Northeast Calgary is $800,000, down from $1.5 million two years ago. Current prices are closer to $600,000 per acre in Southeast Calgary and Airdrie, the survey found, the lowest levels since mid-2006.
Colliers notes that low interest rates, a recovery in oil prices and growing demand for small bay market tenants the Calgary industrial market "is relatively healthy."
