A survey shows Calgary topping commercial real estate returns world-wide, ahead of London, Sydney and New York.
According to this month’s global survey by Investment Property Databank Ltd, in which the top 10 locations were all in North America, Rental income and higher property values in Calgary produced a return of 21.6 percent. Booming oil and gas industries and a restricted supply were credited for the high rate, IPD said. The next three cities after Calgary were San Diego (19.5 per cent), Portland (18.0 per cent) and Seattle (17.7 per cent).
"An energy-driven economic boom in Alberta . . . generally benefited the city, and brokers reported prime office space in the central business district to be near full occupancy at year-end," the report says. The report will draw international investors to the area, says Susan Thompson, business development manager for real estate with Calgary Economic Development.
"Calgary didn't go as deep into recession as a lot of the markets on this survey and we bounced back a lot faster," says Thompson. "If you are a global investor, you're looking for cities that have long-term potential for stable returns. So if Calgary is ranking fairly low in volatility and high in returns that would make it very attractive."
Calgary, along with and Perth, Johannesburg and Cape Town, were the best long-term investment prospects of the cities surveyed.
London had a 6 percent gain in property values last year, the most in Europe, while New York real estate appreciated by 8.6 percent. The U.S. and Canadian markets recovered from the global credit crisis about 12 months after Europe, IPD said. The survey excludes China and some other Asian countries. "The financial centres of London and New York benefit from the quality of real estate and tenants as well as market transparency and liquidity," IPD senior director Peter Hobbs said.