Future Cities

Emerging Industrial Markets: Edmonton

July 21, 2022

The Edmonton metropolitan region is perhaps the most affordable and accessible distribution and manufacturing market in Canada. Edmonton’s strong industrial real estate fundamentals and connection to the deep-water Port of Prince Rupert are primary attractions for both investors and occupiers. Edmonton also is positioned to become a global supplier of low-cost hydrogen to fuel zero-emission vehicles.

Gregg C. MaimannCBRE Senior Vice President

Demographics

More than 1.9 million people live within a 100-mile radius of the Edmonton metro area, with a projected growth rate of 1.5% over the next five years. The important 20-to-34 age group accounts for 22% of the total population. Within 250 miles, occupiers can reach 4.3 million consumers.

Edmonton has a warehouse labor force of 17,832, according to CBRE Labor Analytics. The average hourly wage for a non-supervisory warehouse worker is US$16.92 per hour. Edmonton has a relatively young population with a median age of 37, compared with the Canadian average of 41. The city boasts affordable home prices and rental rates well below those in Vancouver, Toronto and Calgary. Edmonton’s average monthly rent of US$975 for a two-bedroom apartment is 44% lower than Vancouver’s, 32% lower than in Toronto and 24% lower than Calgary.

Logistics Drivers

Edmonton is the closest major city to the Alberta oil sands, a major source of heavy crude oil. As such, it serves as a strategic base for the energy sector. Other top industries include agriculture, manufacturing and technology.

The Canadian Pacific and Canadian National Railways provide the area with broad transportation outreach capabilities. The region is also served by Edmonton International Airport, which has the largest land mass of any airport in Canada and is currently undergoing a $36 million cargo-expansion project that includes increased air service capacity, new fueling systems and additional cold-storage facilities. The airport has rail service from the ports of Prince Rupert and Vancouver, providing both with air cargo service to all points in Canada and the U.S., and is very near Nisku Industrial Park—a 5,000-acre complex that is home to more than 400 businesses. It also has direct access to the CANAMEX Corridor from Canada to Mexico, as well as two intermodal railyards that provide inland and marine container service. The airport attracts many industrial freight and logistics operators. For example, Rosenau Transport occupies a 210,000-sq.-ft. warehouse on-site for distribution of agricultural input products such as seeds, fertilizers and pesticides. Edmonton International also recently became the first Canadian airport to test delivery of commercial cargo by drone.

Two seaports serve the Edmonton region. The Port of Vancouver, Canada’s largest, consists of 29 marine terminals that ship approximately $200 billion worth of cargo annually to more than 170 countries. The Port of Prince Rupert is North America’s closest port to Asia by up to three sailing days and is situated along the continent’s deepest natural harbor. The Canadian National Railway links the port directly to Edmonton. To limit any future supply chain disruptions and alleviate potential congestion, the port authority plans to add a second container terminal that would increase its annual capacity by up to 2 million standard cargo containers.

Supply & Demand

The Edmonton industrial market has a total inventory of 144.3 million sq. ft. and has recorded more than 3 million sq. ft. of positive absorption through Q2 this year, more than double the amount of the same time last year. Limited available supply has led to a slight increase in asking rents, although Edmonton rates remain more affordable than those of Vancouver and Toronto. Metro Edmonton has ample supply of fully serviced industrial land, which is expected to facilitate new development for years to come. The market currently has 4.5 million sq. ft. under construction, more than 80% of it already preleased. Strong demand for space by e-commerce and warehouse & distribution operators is expected to continue.