Commercial real estate investment value on pace to surpass 2017 total

Investment in Canadian commercial real estate is expected to break records for a third consecutive year, led by demand in the Toronto markets and industrial sector

Commercial real estate dollar volume in the third quarter of 2018 has signified potential for another record-breaking year in investment value.

Commercial investment across the country may reach an all-time high for the third year in a row, according to new statistics by CBRE. The third quarter recorded 38.6 billion in sales year-to-date, nearly exceeding the $43 million total investment value in 2017. 

“This is the third year Canadian CRE investment will have hit an all-time high in trading volumes, and it’s no secret why: Canada boasts a rapidly growing population and diverse economy, and the security of income from real estate versus other asset classes looks like a safer bet,” said Peter Senst, president of CBRE Canada, Capital Markets. 

Investment value was led primarily by demand in the Toronto market and the industrial sector. 

Commercial investment in Toronto accounted for $14.5 million year-to-date, followed by $4.5 million in Montreal, $3.8 billion in Calgary and $3.3 billion in Edmonton.

Industrial investment across Canada accounted for more than a quarter of all real estate transaction value at $10.1 billion year-to-date – eclipsing the total dollar volume for 2017 of $7.4 billion. 

“Calgary has already doubled its 2017 industrial investment total and Edmonton has tripled its 2017 industrial investment volumes, while Halifax has seen its industrial investment increase nearly tenfold compared with 2017’s total: $215 million versus $26 million,” the press release reads.

Multi-family real estate is the second-best performing asset class, accounting for $5.5 billion in sales so far this year. 

Moving forward, lack of available multi-family stock and land supply for new projects may slow further investment.

Tanya Commisso | Western Investor | December 20, 2018