What drives Calgary's industrial land assessments?
The type of business, where their customers are located and what kind of traffic they have coming in and out are all key to determining the optimal location for a customer.
As with any city, not all industrial land is created equal. Calgary has a hierarchy of rates that range from Central at the high end followed by the North and South. Kum Mulenga, Valuation Leader, City of Calgary, Assessment, foresees that hierarchy to continue. For Mulenga, the question is, “Where are businesses willing to pay that premium for their business needs?”
Northeast – home to Calgary’s International Airport
Demand for industrial land in the city’s northeast has been driven by proximity to the airport and agglomeration effects from such state-of-the-art mixed-use business parks as Stonegate Landing.
From a distribution standpoint, the airport is a big driver. Any business that deals with high-value/low-volume goods coming in by air cargo would want to be close to the airport.
There are approximately 650 acres of vacant land in the northeast and northwest quadrants of the city currently zoned for industrial uses. In the northeast, the average cost for lots up to two acres is $900,000 per acre.
Northeast industrial has a greater percentage of retail and commercial uses (low rise office space) and attracts businesses with linkages to the airport. "You’re getting industrial zoned land with commercial uses that appeal to more commercial-oriented tenants or industries," explains Mulenga.
New developments feature 30- to 35-foot clear wall height and are designed to cater to the emerging industries like e-commerce, logistics and distribution
South – distribution and logistics centres
The largest supply of vacant land zoned for industrial use is in the city’s southeast," says Mulenga. With 1,440 acres available, recent sales have indicated a lower price than similar parcels in the north. The average cost for lots up to two acres is $730,000 per acre.
Southeast Calgary provides easy access to major transportation corridors and is desirable for manufacturing, warehousing, commercial machinery, vehicle repair services and motor freight. Many of Canada’s largest retailers such as Home Depot and Canadian Tire have their western Canadian distribution centre in the Calgary region.
Already home to large-scale distribution and logistics centres, active construction is currently underway on new large-bay developments and industrial condominiums.
Central – low supply and high demand
Demand for industrial land in the city’s northeast has been driven by proximity to the airport and agglomeration effects from such state-of-the-art mixed-use business parks as Stonegate Landing.
Calgary central is attractive for businesses that require full services, transit service, amenities for employees (restaurants, shopping, banking), proximity to population (labour, suppliers and customer base) and access to both CP and CN intermodal facilities.
Vacancy rates for improved industrial properties are the lowest in the city. Low supply has led to redevelopment or repurposing of older improvements. These factors have led to an increasingly diverse use of these lands.
"Microbreweries are blurring the lines between industrial and commercial enterprises," says Mulenga. Other creative ventures include craft distilleries and the repurposing of old warehouses into desirable industrial condominium projects.
Making the best decision
As you can see, Calgary offers a wide range of industrial areas with features that appeal to different customers and different price points. Knowing the assessed land values of each area can help you decide the best location for your business.
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