Edmonton, Alberta – Canada
Edmonton continues to ride the wave of economic revitalization taking place in Alberta as all major indicators point towards another year of healthy growth for both the city and the province. Investment volume in Edmonton and the surrounding area for the first half of 2013 was up almost $350 million compared with the first half of 2012, reaching $1.6 billion. These numbers are indicative of the cyclical trend that has gripped the market during the last three years, with larger investment totals occurring in the first and last quarters and dropping off during the second and third. Despite steady growth, particularly in contrast to the rest of the country, Edmonton has yet to see investment volumes top out above the peak rate of $4 billion – seen in 2007, the height of the most recent Alberta boom.
Cap rates in Edmonton have been decreasing steadily, due in large part to increases in revenue associated with the buoyant economy. Vendors have been taking advantage of the larger revenue streams and are subsequently requiring much higher prices to be convinced to sell, even while factoring in rising valuations on multi-residential buildings.