Calgary's industrial market has been very strong for some time now. There have been high levels of absorption of existing space, and new construction activity for both pre-leased and speculative product. The market is anticipated to continue it's strong performance in the foreseeable future..

Calgary continues to benefit from its role as the premier distribution centre for Western Canada. General and high tech manufacturing uses are also a major contributor to the health of the industrial market. The strong absorption of industrial land throughout Calgary is a direct result of new construction of both owner occupied and leased distribution and manufacturing facilities.

The strength of Calgary's industrial market is due to a number of factors. The Government of Alberta has put its financial house in order, eliminating the annual deficit. Further, Alberta has the lowest of all tax burdens, both personal and corporate, in Canada. Relative to the industrial market, land is cheap as compared to other major urban centres. Calgary's location in Western Canada is advantageous from a distribution standpoint. Other factors which contribute to the economic success of Calgary include the high standard of living, affordable cost of living and the general vitality of the "pro-business" attitude prevalent in the city..

Calgary has a city-wide industrial inventory of 76,310,174 sq. ft. The city-wide vacancy rate has decreased from 3.4% (12/99) to 2.3% (06/00). The decrease in vacancy is the result of 2,828,822 sq.ft. of net positive absorption which is higher than the total absorption seen for most full years.

New construction reached 2,000,000 sq.ft. in the first half of 2000 which is the highest level of new construction in the first half of any year in Calgary's history. Construction has focussed in the northeast quadrant (1,053,100 sq.ft.) and the southeast sector (993,646 sq.ft.) with no new construction in the South Corridor. Construction is anticipated to reach 3,300,000 sq.ft. by year end.

The Calgary industrial market is forecast to remain very strong with vacancy rates to remain stable between 2.0% and 2.5%. Rental rate increases are anticipated, particularly for large bay product in the southeast while rental rates will remain stable in the northeast due to significant existing and new available product.