According to the latest commercial investor report from RE/MAX, Kelowna and Edmonton are poised to become hot spots for Canada’s cannabis market post-legalization with competing cannabis businesses looking for operating space in both cities.
The City of Kelowna has identified more than 900 potential locations for dispensaries and it’s expected that approval of licenses will be extremely competitive further driving up prices in the region. In Edmonton, the addition of an 800,000-square-foot facility by Aurora Cannabis in the city contributed to the positive growth in the total sales value for the city’s commercial properties, topping $1 billion.
“In Kelowna and Edmonton, the cannabis industry is slowly absorbing the existing industrial spaces and development lands, which has contributed to the rise in lease rates for those areas,” said Elton Ash, regional executive vice-president, RE/MAX of Western Canada.
Other factors driving the growth of commercial real estate in Western Canada include:
“As Canada continues to push further ahead in areas like technology, investors both domestic and abroad see the potential for growth here and are willing to call Canada home,” Ash said.
“Investment by major companies like Amazon in Calgary and Greater Vancouver is evidence that commercial real estate – office space specifically – in Western Canada remains a hot commodity,”
Calgary is expected to remain stable heading into 2019 due to a variety of reasons, including the investment of big technology companies in the area.
Continued growth in Vancouver’s technology sector continues to drive demand for both office space and industrial space throughout the region. Larger tenants like Amazon and WeWork continue to expand and are expected to further increase inventory in the region going into next year.
Regina’s commercial real estate market has slowed this year due to economic uncertainty, however, new projects are still underway such as the construction of the megamall at the Global Transportation Hub. The mall – which will boast 300 stores – was originally billed at $45 million, but could go as high as $300 million when completed.
Retail centres in Calgary remain in high demand with a vacancy rate of four per cent.
Other highlights from the Commercial Investor Report 2018 include:
Saskatoon has experienced relative stability following what was considered a year of recovery in 2017. This is mostly due to the relative diversity of its sectors which include manufacturing, agriculture, construction, and the service industry.
In Winnipeg, the commercial market has experienced a three per cent decrease in total sales value year-over-year. While interest rates have remained low, the lack of available property has had the biggest effect on sales which has affected the decisions of investors. Higher vacancy rates can be found in regional malls with the closure of large anchors.