Nov 9, 2010, Calgary industrial land selling for more than 600,000 per acre

Buyers are still cautious for Calgary and area industrial land sales this year but interest is beginning to pick up.

So far this year, 53.4 hectares of industrial land has sold in the Calgary area for a total dollar volume of $70.8 million. Last year, virtually the same amount of hectares sold for $59.7 million.

“It’s still cautious I guess but there is activity. There’s people looking and there are deals happening,” said Luke Stiles, partner and associate with Advent Commercial Real Estate Group in Calgary.

“It’s positive. People aren’t waiting anymore. They’re really looking at the numbers hard and they’re trying to get a good deal going and they want to proceed. And we’re hearing that.”

A report by Advent said 31.2 hectares of fully-serviced industrial land has sold this year for $50.1 million or $605,864 per acre inside the city limits. In 2009, 10.5 hectares of fully-serviced industrial land inside the city limits sold for $21.3 million or $857,009 per acre.

The current vacancy rate in the industrial real estate market is 4.81 per cent in an inventory of close to 118.5 million square feet. In 2009, the vacancy rate was at 6.6 per cent.

According to a third quarter Calgary industrial market report by CB Richard Ellis Ltd., land absorption has been slow since the beginning of 2009.

The report said that as of the end of the third quarter, there was more than 1,861.5 hectares available within Calgary and the outer limits of Balzac and Airdrie.

Over 404.7 hectares of available land was in the southeast area of the city with a selling price between $500,000 per acre and $600,000 per acre.

“Land prices have stayed constant despite a limited number of transactions in 2010,” said the report.

“There is an enormous amount of supply available and not enough demand to create equilibrium within the land market.”

By Mario Toneguzzi, Calgary Herald