Alberta’s industrial real estate market, particularly in Edmonton and the northern part of the province, is experiencing a revitalization fueled by the imminent growth of the hydrogen industry.
The ambitious expansion aligns with the Alberta government’s Hydrogen Roadmap, projecting a potential worldwide market value exceeding $2.5 trillion annually by 2050.
According to the Alberta government, hydrogen emerges as a lucrative energy export, poised to generate jobs, attract investments, and stimulate economic opportunities across the province. The demand for real estate, a pivotal aspect of the emerging hydrogen sector, is underscored by Gregg Maimann, Senior Vice President of Industrial Sales and Leasing for CBRE in Edmonton.
CBRE’s recent sale of 152 acres of land in northeast Edmonton to U.S.-based Air Products exemplifies the strategic role of real estate in the hydrogen sector. Air Products is set to construct a $1.6-billion complex utilizing Auto Thermal Reforming (ATR) technology to convert natural gas to hydrogen. Suncor and ATCO are also contributing to Alberta’s hydrogen landscape, emphasizing the region’s appeal for significant industry players.
Alberta’s affordability, boasting the lowest corporate tax rate in Canada, coupled with a thriving industrial market, positions the province as an ideal hub for hydrogen-related activities. The influx of companies and migration from costlier areas like Toronto and Vancouver is testament to Alberta’s economic appeal.
The demand for mid- to small-sized industrial spaces is on the rise, driven by tenants supporting hydrogen activities. CBRE’s involvement in securing land for plant construction and distribution centers highlights the specialized logistics required for the burgeoning hydrogen sector. The Edmonton/Leduc industrial strip, with land available at a fraction of costs in other major Canadian cities, stands out as a hotspot for real estate growth.
The momentum isn’t limited to hydrogen alone. Varme, a waste-to-energy firm, is actively developing projects in the Alberta Industrial Heartland, focusing on integrated carbon capture and storage, and bioenergy assets. The company aims to provide sustainable waste solutions while contributing to clean energy and carbon capture efforts.
In a significant move towards reducing greenhouse gas emissions, Wolf Midstream Canada plans to extend the Alberta Carbon Trunk Line (ACTL) through the core of the Alberta Industrial Heartland to the Edmonton region. This expansion, supporting industrial facilities, is a strategic step towards a greener future.
Despite a slight dip in industrial real estate transactions in the Edmonton region in Q3 2023, the overall trajectory remains positive. Owner/users, especially in properties measuring 20,000 square feet or less, are driving acquisitions, showcasing the robust demand for industrial manufacturing (IM) and industrial business (IB) zoned properties.
