Even as oil prices trade near the highest in four years, offices in the capital of Canada’s energy industry are about as empty as they’ve been since at least 2008.
The office vacancy rate in Calgary climbed to about 23 percent in the first quarter of this year, up from 20 percent a year earlier, according to a report from Toronto-based Altus Group Ltd. The increase is partly due to the completion of 2.5 million square feet of office space in the year through March, the real estate consulting firm said.
Demand has lagged as well. First-quarter sales of office-investment properties plunged 83 percent, according to Altus. Overall investment-property sales slumped 28 percent in the first quarter, a C$295 million ($222 million) drop from a year earlier.
While global oil prices have rebounded over the past 12 months, Canadian crude’s discount to the U.S. benchmark has widened in that period, hurt by a shortage of pipeline space. That’s restrained producers from ramping up output and led to continued job cuts at companies including Cenovus Energy Inc.