Search this blog:
Follow Avison Young:

Thursday, July 21, 2011

Interest Remains in All Things Producing, Leasing or Developing

By Walsh Mannas (Calgary)

The Avison Young Office Report for the second quarter of 2011 (found here) points out Calgary’s office market has continued its recovery with quarter over quarter positive absorption rounding out two years of declining vacancy. As drilling rig utilization and energy investment continue to increase in Alberta we see more positive absorption possibly at a quicker pace occurring in the remainder of 2011.

The office leasing market is certainly not the only market we are witnessing robust leasing and investment activity. As the Avison Young Mid Year 2011 Retail Report (found here) points out retail leasing has also had a strong start to 2011 as retail sales increased and unemployment trended downward. Popular American retailers have also began to enter the Canadian market (Target, J. Crew) which has motivated Canadian groups to look at consolidation and diversification.

With China’s CNOOC stepping in to purchase Opti Canada Inc, a prominent oil sands producer (see CBC's coverage here), Canadian Tire announcing its purchase of the Forzani Group for $781M (see Reuters' coverage here) and Target taking over up to 220 lease hold interests for $1.8-billion from Zellers, the only certainty in the Alberta market is the liquidity and interest in most things producing, leasing or developing be they energy or real estate related.

On the investment front we have recently seen low benchmarks being set in both retail and office transactions with interest returning to all classes of real estate investment product in almost every part of the province, be it small retail in Lethbridge, distribution facilities in Calgary or core office product in Red Deer.
I am interested to see how the American Government resolves the debt ceiling issues surrounding the August 2nd deadline because it seems any measure but to increase the debt ceiling could have far reaching repercussions into every market in the world, including the ability to stunt Alberta’s robust and quickly recovering economy.

The postings on this site are those of the bloggers and do not necessarily represent the views or opinions of Avison Young.