A Smart Investment: The Edmonton Area is Attractive, Affordable and Growing
Equiton recently purchased its first property outside Ontario and it’s in the Greater Edmonton Area. Entering the Alberta market through the acquisition of Emerald Hills Landing in Sherwood Park, AB, just 20 minutes from downtown Edmonton, paves the way for opportunities in other Canadian regions and further diversifies our Apartment Fund for investors. As our inaugural property with a national presence, extensive thought and analysis went into this decision, ultimately showing the Edmonton area to be a smart investment as well as a great place to live and thrive.
Get to know Edmonton
Though one of the youngest major cities in the country, Edmonton is Alberta’s capital and the fifth largest city in Canada. Even so, when most people think about Edmonton, the West Edmonton Mall immediately comes to mind. Admittedly, West Edmonton Mall is a big attraction – did you know it was the largest mall in the world until 2004 and at one time had more submarines than the Canadian navy? – but it’s not the most compelling aspect of this province. Edmonton also contains North America’s largest stretch of urban parkland and experiences some of the best weather in the country. Its strong foundation of natural beauty and exceptional weather are attractive features, but it also has a strong economic base, job market and is among the most affordable places to live in Canada.
The Edmonton region includes an inland port known as Port Alberta where air, rail, pipelines, and roadways meet within a Foreign Trade Zone. This beautiful northern location, along with favourable regulations and incentives, make the Edmonton region an international manufacturing, cargo, and logistics hub. Edmonton attracts industry because it costs less to operate a business in the Edmonton area due to the fact that Alberta has the lowest combined corporate tax rate in Canada and one of the lowest in North America. Companies currently benefitting from the low cost of doing business include some of the world’s biggest tech companies: Apple, Microsoft, IBM, and Amazon, among others.
Job Market and Affordability
In BMO’s recent Regional Labour Market Report Card – Strength on the Prairie, Edmonton ranked 4th in Canada for labour market performance. It’s in good company with Calgary sitting in the number two slot. “At a high level, Alberta continues to look very strong, with 4.3% y/y job growth and a 2.6 ppt decline in the jobless rate from a year ago. The province is also drawing in migrants from elsewhere, and is expected to perform relatively well over the coming year,” writes Robert Kavcic, Senior Economist and Director Economics at BMO. Continuing this trend and drawing skilled workers to the province is a major focus of the Alberta government who launched a pilot program to help those who are unemployed or underemployed explore jobs in the construction industry with the possibility of landing an apprenticeship. Through innovative solutions like this program, Alberta saw the highest employment growth in the country in 2022 with an increase of 68,200 jobs between December 2021 and July 2022, compared to an increase of 47,800 in Ontario.
Along with job growth, Alberta also continues to have the highest median after-tax income of the provinces ($77,700) according to Statistics Canada’s Canadian Income Survey, 2020 released in March 2022. When all taxes are taken into consideration, Albertans across all income ranges generally pay lower overall taxes compared to other provinces. Alberta is the only province in Canada without a provincial sales tax and currently has no fuel tax. High average wages combined with a low cost of living makes Edmonton a desirable place to live.
Multi-residential an essential commodity due to population growth
Alberta, and Edmonton in particular, have shown considerable population growth in recent years. Since 2018, Edmonton’s population has grown by 8.46% with its current population sitting around 1.5 million people. Over the next 10 years, the population is projected to reach over 1.7 million; a 12% increase by 2032. Growing by more than a fifth over 15 years means a staggering number of people will require a place to live during a time of a country-wide supply/demand imbalance in the housing market.
With 1.45 million newcomers expected in Canada as part of the government of Canada’s new 2023–2025 Immigration Levels Plan, multifamily apartments are even more essential than ever before. The multifamily market in Edmonton has demonstrated positive trends through the sheer volume of multifamily land sales they’ve experienced, even throughout the pandemic. “The momentum continues to build with 18 multifamily land sales in the first half of 2022. And we have another seven sites pending that will close this year, in addition to a number of off market or direct sales” reports Cody Nelson, Associate Vice President at CBRE.
Why we chose to add this property to our portfolio
Emerald Hills Landing, built in 2022, offers stable cash flows and requires lower expenditures for capital improvements, maintenance, and unit turnover compared to older buildings. Edmonton also has strong market fundamentals with a record number of new units added to the rental market last year which was met with strong demand as the economy recovers from the pandemic and years-long energy sector slump.
Attributes: This property has four storeys, 104 units and includes 79 indoor parking spaces, and 36 outdoor parking spaces. It boasts generously sized suites (avg. 902 sq. ft), features in-suite laundry, quartz counters, stainless-steel appliances, and lots of natural light.
Building Amenities: Social room, lounge area, and a fitness centre.
Attractive to Residents: This property will be very competitive in the market as it offers tenants new, large suites with high-end features and finishes. It’s also in a great location close to shopping centres, hospitals, and outdoor recreational activities.
Low Vacancy: The property is fully leased and had no vacant units on closing.
ESG Components: The building contains energy efficient building systems to reduce utility consumption, internal social programs to increase community awareness, and an affordable housing component (21 suites).
Desirable Tenant Base: This property is a mature lifestyle community which is ideal because individuals in this age group tend to be wealthier, reliable, and interested in living in rented homes for long time periods.
This great new property is just the newest addition to Equiton’s Apartment Fund. Now that Equiton has expanded outside Ontario and obtained national presence, there’s a country’s worth of investment opportunities at our fingertips. We’ve proven that we have the expertise to buy the right properties, in the right locations and manage them properly to create homes for our residents and earn the best returns for our investors. Contact us today to find out how you can benefit from this exciting new stage in Equiton’s development while adding a layer of stability and diversification to your portfolio.