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Altus Group, which specializes in commercial real estate services, software and data solutions, says Calgary's investment in commercial properties has seen its best first quarter in nine years. Overall investment property sales transactions volume increased by 69 percent from the previous quarter, with the number of deals up by 32 percent. Q1 2017 saw 143 sales transactions of over $1 million, totalling just over $1 billion in investment value.
The office sector made up the preponderance of the gain, representing a 46 percent share of the total dollar volume. The first quarter was marked by 14 office transactions for a total value of $481 million. That's an exponential increase from the $55 million recorded in the previous quarter, and an even larger boost from the comparatively measly $7.4 million from the first quarter of 2016. The substantial boost lies in the purchases of the TransCanada Tower by HOOPP and the acquisition of a dozen buildings by Slate Asset Management.
Piggybacking on the good news is the industrial sector, which experienced 37 transactions worth $215 million. Capturing 21 percent of the sales transaction value, the total is up 40 percent from Q4 2016 and double the same quarter last year. Jumping 43 percent from the previous quarter, there were 18 transactions registered in the residential land sector, totalling $105 million.
The retail and ICI (Industrial, Commercial, and Institutional) sectors posted poorer results from Q4 2016, but were still up from the first quarter last year. There were 19 transactions totalling $80 million in the retail sector, translating to a 45 percent drop from the last quarter but a 37 percent gain from Q1 2016. The 43 transactions in the ICI land sector totalled $103 million, representing a decline of 20 percent from Q4 2016 but a slight four percent bump from the same quarter last year. The apartment sector's nine transactions were worth $30 million, mirroring the previous results but down 72 percent from Q1 2016.
"Transaction values in the Calgary market have reached the $1 billion dollar mark for the second time in two years, however the market has also approached historic lows during that same time frame," said Paul Richter, Director, Data Solutions, Altus Group. "Portfolio and larger individual property transactions are an indication of confidence in the market, however they represent an overarching influence on the total numbers and mask the more tepid underlying market performance."
