Two cities in Western Canada are showing rising demand for space from the recreational cannabis industry.
Edmonton and Kelowna are set to become pot hot spots as growers seek increased space in the region according to a report from RE/MAX of Western Canada.
“The upcoming legalization of cannabis is continuing to have a major impact on the commercial real estate market this year,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “In Kelowna and Edmonton, the cannabis industry is slowly absorbing the existing industrial spaces and development lands, which has contributed to the rise in lease rates for those areas.”
For Kelowna, 2018 has seen an 8% decrease in total sales values for commercial property types year-over-year but with 900 locations identified for retail, the surge in licence applications from the cannabis sector is expected to drive prices higher.
Tech, ecommerce also thriving
With the technology and ecommerce sectors continuing to show exceptional growth, other Western Canada markets are benefitting.
Calgary’s commercial real estate market primarily revolves around the city’s oil and gas sector. But while these sectors remain cautious, the market is expected to remain stable heading into 2019 for a variety of reasons including the investment of big technology companies in the area.
Continued growth in Vancouver’s technology sector continues to drive demand for both office space and industrial space throughout the region. Larger tenants like Amazon and WeWork continue to expand and are expected to further increase inventory in the region going into next year.
“Investment by major companies like Amazon in Calgary and Greater Vancouver is evidence that commercial real estate – office space specifically – in Western Canada remains a hot commodity,” says Ash. “As Canada continues to push further ahead in areas like technology, investors both domestic and abroad see the potential for growth here and are willing to call Canada home.”