Industrial leasing and sales activity in Edmonton remained strong during the first quarter of 2013, as the overall vacancy rate declined to 3.4 per cent from 3.7 per cent at year-end 2012, according to a recent report by Avison Young.

High demand and a lack of product in the region continued to place upward pressure on lease rates. trend was especially noticeable in stand-alone buildings with good quality yard space.

Economic growth in the area has continued to fuel a very active land market, with strong transactional volume carrying over from the end of 2012.

“The average cost of serviced industrial land has seen substantial jumps in pricing year-over-year as the cost per serviced acre has markedly increased across Edmonton,” says Avison Young principal and industrial property specialist, Colin Ludwig. “This increase is also being witnessed in the Greater Edmonton region as land pricing in Acheson, Nisku and Strathcona County is also beginning to push higher.”

In the northwest sector of the city, the average serviced industrial land cost per acre climbed 10 per cent since the fourth quarter of 2012, to close the first quarter of 2013 at $645,000. Pricing also increased by more than two per cent in the southeast sector of the city to an average of $670,000 per acre. Leasing activity in Edmonton’s industrial marketplace is becoming increasingly tight, lifting lease rates as much as 20 per cent during the last six months for some smaller bay product.