urban growth

Retail leads GTA investment transactions in Q4

Monday, February 5, 2018

The Greater Toronto Area’s (GTA) commercial real estate market recorded $14.5 billion in investment capital for 2017, outpacing the 2016 tally of $11.8 billion. In Q4, two frontrunners surfaced in Avision Young’s GTA Commercial Investment Review Q4 2017.

While there was an overall 27 per cent sales dip from Q3 to Q4, retail was the top-performing asset class in the last quarter, completing three of its four biggest deals, such as the $192-million sale of retail podium at the One Bloor St. E. condominium in downtown. This sector posted more than $891 million in sales (26 per cent of total GTA dollar volume), while the industrial sector followed closely at $844 million, despite declining nine per cent quarter-over-quarter.

The most active industrial region for the first three quarters was Peel, and then the City of Toronto rose to the top in Q4 with nearly $254 in sales. The year’s biggest industrial sale was 8875 Torbram Rd., sold by Carttera Private Equities to Concert Properties for $158 million in April.

Sales were down in the multi-residential and office sectors. Multi-residential was the only sector not to approach or set a new high for sales volume in 2017, falling short of its $1.9-billion 2015 peak. Lack of available product and commanding the lowest yields hindered this sector the most, which tallied $547 million in Q4 and $1.6 billion for the year.

Office building investment dropped 74 per cent between quarters, with $456 million sold in Q4. But an annual total shows almost $4.2 billion in sales and back-to-back quarters above $1 billion in trades. This performance also included nine of the GTA’s 19 $100-million-plus sales.

A new sales benchmark was established for the ICI land sector, with $2.2 billion in 2017. This declined five per cent between quarters to $628 million. As sales were boosted in the City of Vaughan and Township of King, York Region was the most active for both acreage and dollar volume during Q4, Avison Young reports 701 acres were sold in this region (34 per cent of the GTA total) for a combined $279 million. Overall, almost 2,100 acres changed hands during the fourth quarter and more than 13,300 acres in all of 2017.

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