Edmonton has cornered Canada's industrial property market.

When it comes to multi-tenant industrial property, there's Edmonton and there's the rest. The city, as of the first quarter of 2007, is Canada's hotspot for this segment of the real estate market.

But it's not just industrial land that has put Edmonton on the map for developers and investors. Real estate officials painted a picture of an economy on fire and a property market that is sizzling at a recent Edmonton Real Estate Forum held at the Shaw Conference Centre.

The multi-tenant industrial market is white-hot, with 20 buyers for each seller, says Keith Fraser, executive vice-president and general manager of Altus Helyar, which specializes in consulting and development cost-management practices.

"Multi-tenant industrial in Edmonton is the No. 1 chosen acquisition in Canada," he told the forum.

Fraser added he expects both the market and Edmonton's lead to stay strong for at least the next 12 months.

"Edmonton has been undervalued and I think people see it as part of the Alberta strategy and the Alberta Advantage - in the sense of moving forward with development in the oil and gas sectors," he said. "Edmonton is the service community for that sector for much of what goes on in central and northern Alberta."

Demand is strong, added Fraser, because of the nature of the Canadian industrial property market. A lot of companies are in older facilities and it's time for them to upgrade into modern, larger spaces capable of meeting today's needs. Tie that in to the growth of the economy in the Edmonton region - nine oilsands upgraders are planned for the area with a potential economic impact of more than $100 billion over the plants' 30- to 50-year lifecycles - and Fraser says it's not surprising to see interest from Canada, the U.S. and international investors for multi-tenant industrial property.

At the same time, industrial vacancies in Edmonton are running below two per cent, possibly as low as 1.6 per cent based on pending deals from the first quarter of this year.

"It seems the world has discovered that Edmonton has a strategic location," said Rod Connop, associate vice-president of Colliers International. "Companies are realizing that things flow fairly smoothly from Edmonton."

While new industrial product is being brought onstream, Edmonton's industrial market is essentially full at the moment, Connop noted. "The trick is finding the space. We have lots of orders and no way of filling the orders."

All this comes into play at a time when Edmonton is wrestling with how best to build itself into the city it wants to be. Development projects are starting to pile up in the city's downtown core and one developer, Calgary's Pro Cura Real Estate Services, has amassed large parcels of downtown land that will make it a major player if it proceeds with all its plans.

One item on Pro Cura's agenda would see the city's old Paramount theatre on Jasper Avenue make way for a 40-storey office and condo highrise.

A new downtown arena for the Edmonton Oilers would also alter the downtown landscape. Jim Taylor, executive director of the Edmonton Downtown Business Association, told the forum audience that such an arena will likely become a reality.

Edmonton Mayor Stephen Mandel, who also spoke at the forum, said it's important to lay the groundwork now for long-term growth rather than just concentrating on the immediate future. "We have to look beyond our terms in office," said Mandel, who is also calling for regional municipalities to work together for everyone's benefit.

Developers, meanwhile, say even with a scorching real estate market that has sent valuations and prices in all sectors soaring, opportunities are still available.

"There are some terrific opportunities for real estate investment," said Ralph Young, president and CEO of Melcor Developments Ltd. "You've got to be highly disciplined. There are still great opportunities for entrepreneurs who see opportunities or create opportunities."

However, Young expressed concern that the market fundamentals may not support the higher prices being paid on spec.

But regardless of the property type, no one sees an imminent downturn.

Some at the forum voiced the opinion that - barring a catastrophic world calamity - a correction would stabilize the market, which is likely to take off once more, but in a more controlled manner.

CIBC World Markets senior economist Benjamin Tal, the forum's opening speaker, said the overall economic outlook remains positive.

As for concerns about the world running out of oil, Tal noted that is not the case."We're just running out of cheap oil."

But it's not just about oil, Tal said, it's also about uranium. Canada, he noted, is the "Saudi Arabia" of that commodity, whose price increase has dramatically outpaced the cost of oil, rising to $100 per pound in 2007 from less than $10 per pound just one and a half years ago.

(Laura Severs can be reached at laura@businessedge.ca)