Alberta’s economy is poised to reap the benefits of multi-billion-dollar investments coming to the province in the near future, according to Scott Hutcheson, the executive chair of Aspen Properties. 

“In the next year we’ll hit $10 to $20 billion easily in new attraction of investment in our province. In fact, I’ll go further and say the first quarter of next year Q1 will be the best year that we’ve seen for investment coming into our province,” said Hutcheson, who also serves as chair of Invest Alberta and is on the board of commercial real estate firm QuadReal Property Group.

He made the comments recently during a roundtable discussion at the Calgary Real Estate Forum.

In an exclusive interview with RENX following the forum, he went even further, forecasting “we will have at least $50 to $60 billion of data centres announced next year.”

And that is just data centres.

“Alberta’s premier has made it friendly, for one. We have cheap land for two. We have a relatively inexpensive power grid for electricity. We have a cold environment. So with hot server rooms you can cool relatively easy with fresh air. We’re not compressing air the same way they might in some of the warmer environments,” Hutcheson explained.

“And Alberta is a predictable political environment that is encouraging of business. And there’s good access to the data information cable. The internet. There’s no latency in the data cable. Those are the key factors.”

The allure of data centres

Hutcheson said Canada isn’t built-out yet in this sector, whereas the U.S. is way ahead. There are also no tariffs on data, which helps.

“Invest Alberta has letters of intent with developers, with land speculators, with end users, with everything in between,” he said. “Because data centres have become a high-growth, alternative real estate investment category, there’s everything in between the end user, spec builders, developers, land spec, private owners of data centres.”

Hutcheson said as long as there’s good access to transfer of data, then land makes sense. But if you’re too far away from those main corridors of the infrastructure to transfer the data, it becomes too expensive.

The other key factor is access to electricity, so data centres can’t be too far off the grid. In Alberta, therefore, they could be situated almost anywhere in the province.

“It’s kind of its own category. It’s one new alternative measure of real estate. It will drive up the price of some land that is underutilized. Not industrial land. They’re not going to generally be located in areas where the industrial land price is much higher,” Hutcheson said. “They’re going to be located in places where land is less expensive.

“The big thing to our province is I think of a factorial as five times. So when you spend a dollar it gets re-spent five more times. If you think of $30 to $100 billion in the near future being invested in data centres, it’s now a category that’s meaningful. It’s not a tiny category....

“And it will be one that will attract institutional investors. The big institutions, the QuadReals, the Oxfords... Caisse de dépôt... The big institutional capital, they’ve all got their eyes on the prize here understanding that it really takes that kind of capital to invest in a data centre.”

Canada's "best business environment"

In the roundtable discussion at the forum, panelists painted a healthy and solid picture for future investment growth in the province.

Kevin Leon, president and founder, Crestpoint Real Estate Investments Ltd., noted his company is involved in its first multifamily project in the market. The Beltline Block, in partnership with ONE Properties, is a highrise, mixed-used development with 1.8 million square feet, including 35,000 square feet of commercial and 1,475 housing units.

It also has a significant presence in Alberta with industrial real estate and retail.

He called Alberta “the best business environment in Canada. It has the least red tape in Canada and I think, and this is a big leap of faith, that the political environment will improve for Western Canada and particularly in Alberta. It certainly can’t get any worse than it was in the last little while.”

“If you take all that with population growth... we look at Calgary as a place we want to invest long term. We’re big believers in the residential market. We’re even looking at the office market...

"We’re bullish on Alberta. I think it’s got some challenges like everywhere else in Canada but long term Alberta will outperform the rest of the country.”