The Value of Investing in Canadian Downtowns - International ...

PROSPERITY
Is the downtown’s economy robust and innovative?
Edmonton’s economy is closely tied to commodities, particularly oil, which lends it a ‘boom-bust’ character. Over the
previous decade, however, Edmonton has been fortunate to experience more moderate growth, partly sheltered from
the recent recession by strong energy prices. Edmonton’s strong economic growth attracts international and
interprovincial migrants, driving some of the fastest population growth in Canada and pushing down the median age
of Edmonton’s residents. The downtown real estate market grew rapidly before the most recent recession, as onethird
of all construction in the city occurred downtown. For example, the assessed value of downtown more than
doubled between 2007 and 2009.
Residential Development
From the late 1990s, the City has successfully pursued downtown residential
growth through grants for residential construction and conversion, coupled
with streetscape improvements. This appears highly successful with the
downtown being one of the strongest areas for residential construction, with
almost 20% of total residential construction value in mature (non-greenfield)
neighbourhoods across the city. Between 1996 and 2006, the housing stock
downtown increased by more than three-quarters. Growth has been similarly
strong in other central neighbourhoods near the downtown, including Oliver
and Queen Mary Park.
Office Development
The office market in Edmonton is overshadowed by Calgary and has struggled
for the past two decades, although the presence of the provincial government
lends it some stability. A promising sign was the development of the $250
million EPCOR Tower in the heart of downtown.
Downtown has
75%
more dwellings from 1996-2006.
(City-wide - 24% more dwellings).
$362.5M
on residential
development downtown
between 2001-2009
Downtown has
65%
of office floor space (16,090,114 sf)
Downtown has
Over the last decade the inventory of office space in Edmonton has increased
an average of 2% per year city-wide. During this same time the downtown
office inventory grew by an average of 1% per year. This relatively slower
growth rate resulted in downtown losing some of its dominance, providing 65%
of citywide office space in 2010 compared to 70% at the beginning of the
2000s. These trends are illustrated in the “Edmonton Office Inventory” graph.
11% more office space
from 1999-2000
12,000
students downtown at 3 university
campuses downtown
Recent reports of additional new office buildings in the planning stages are
cause for optimism, but there is a risk that the market will not be able to
absorb all this new space, leaving older buildings underused.
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