Growth is the key word in a report outlining Calgary’s office, industrial, commercial and multi-residential sectors from one of Canada’s leading fully integrated real estate organizations.
In Morguard’s 2013 Canadian Economic Outlook and Market Fundamentals Research Report, Calgary was singled out as one of the best markets in the country, with the organization predicting even more expansion in the coming year.
Although Morguard predicts GDP in the Calgary area to fall from 3.8 per cent in 2012 to 3.6 per cent in 2013 and to 2.8 per cent in 2014, the organization is nevertheless forecasting continuing prosperity for the city’s office market.
“Calgary’s office sector appears poised for another period of growth over the near term,” stated the report. “The outlook for [Calgary] is one that includes relatively robust economic expansion, supported by a healthy resource sector.”
In Morguard’s industrial outlook, Calgary’s industrial sector will continue to be largely dependent on the region’s economic performance over the near term, with the key drivers being the oil and gas sectors.
“Should these regions see an unexpected worsening of financial and economic conditions, then global growth and demand for Calgary’s resources would decline,” said the report. “However, a level of stability in these regions is forecast for 2013. Assuming the projected stability comes to pass, then Calgary’s industrial sector will reap the rewards.”
With Calgary’s economic expansion forecast to grow by a healthy four per cent in 2013, performance indicators suggest “a bright future” for retail properties in the city according to Morguard. After increasing by 9.2 per cent in 2012, retail sales are predicted to moderate slightly in 2013, increasing by 6.2 per cent.
With the success being seen in Calgary’s retail sector, where occupancy sat at 96 per cent at the close of 2012, the report does suggest that a lack of new development space in the city will offer “minimal relief” for the space shortage for retail renters in the city.
“In summary, Calgary’s retail sector is expected to capitalize on a strong economic outlook over the near term, a trend that will register with existing owners and those groups wishing to gain a foothold in this market.”
Touching on Calgary’s multi-residential sector, the report highlighted the scant space available in the city’s rental market, where occupancy rested at 98.5 per cent at the end of 2012. Driven by a continued increase in immigration and youth employment, Morguard is predicting a “rosy” future for Calgary’s multi-unit residential rental sector.
“An economy that is expected to outperform will draw renters to the market in search of employment. Needless to say, labour market conditions will be boosted by GDP expansion expected to near the 4.0 per cent mark. In short, Calgary’s outlook is one of outperformance, which will support healthy investment and rental market conditions.”