investment transactions

Land tops Vancouver Q2 investment transactions

Tuesday, September 5, 2017

Vancouver’s three largest investment transactions for the  spring of 2017 surpassed an entire quarter’s worth of activity in Calgary. Altus Group’s recently released statistics for April, May and June  tally $3.4 billion in 550 investment property deals in Vancouver versus 109 transactions totalling $531 million in Calgary.

The $274.4-million sale of the two-tower Metrotower officer complex in Burnaby topped the charts, but two other deals for development land exceeded $100 million. Nearly 40 per cent of trades during the quarter involved residential land, with ICI lands accounting for another 15 per cent.

Still, there was a below average flow of capital to development land compared to the previous two and half years. Investment levels across all property types during the first half of the year were on par with the $6.9-billion record in the first six months of 2016.

“While many are sceptical about the ability of these investment levels to continue, we still see transactions at all price points, including the trading of exceptionally high valued assets,” says Paul Richter, director of data solutions with Altus Group. “Land markets continue to be the primary contributors to total sales volumes, but all the major asset classes are recording impressive transaction volumes.”

It’s a different story in Calgary, where second quarter activity generally lagged the previous quarter. The apartment sector was a markedly different performer, however, as 15 trades totalling $92 million represented a more than threefold increase over the first three months of this year.

The industrial sector accounted for the greatest dollar volume of trades, at $126 million, but this was down 39 per cent from the first quarter and 37 per cent from the second quarter of 2016. Retail made for the smallest sliver of the transaction pie with 13 deals equating to $56 million, representing a 16 per cent drop from the first quarter.

“After a strong start to 2017 in Q1, market activity fell back again in Q2, suggesting a recovery that is still in its infancy,” Richter observes. “However, the more even distribution of investment across asset classes seen in Q2 is a positive note and will help set the stage for a more sustained improvement as the Calgary market area continues through its current cycle.”

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