Despite rising interest rates, commercial real estate activity has not slowed in Canada or the U.S., says Avison Young.
The company’s Fall 2013 Canada, U.S. Commercial Real Estate Investment Review covers investment conditions in 24 regions, including Calgary, Edmonton, Montreal, Ottawa, Toronto and Vancouver. According to the report, Canada exceeded pre-credit crisis investment dollar volumes and pricing for most asset categories.
“Canada and the U.S. are on track to meet or exceed 2012’s volume of sales as Canadian REITs and pension funds continue to target strategic U.S. markets,” says Mark E. Rose, chair and CEO of Avison Young. “Canada’s stable economic environment and enviable commercial real estate market saw strong investments in the first half of 2013 across all asset types.”
Rose predicts Canadian REITs will be more discriminating in their acquisition as a result of rising interest rates. If this is the case, he thinks pension funds, life insurance companies and private equity players will fill the void.
According to the report, healthy market fundamentals are continuing to drive investment activity in Canada. In the first half of 2013, more than $14.4 billion of commercial real estate assets (office, industrial, retail, multi-residential and land greater than $1 million) changed hands, up eight per cent from the same period last year.
