Investors snapped up $6.5 billion worth of property in Montreal last year, accounting for nearly 12 per cent of deals valued in excess of $1 million Canada-wide. Gains in the multifamily, industrial, retail, hotel and ICI land sectors translated into an 18 per cent investment volume upswing, standing in contrast to the 4.6 per cent national dip in transactions.
The $786 million investment in office properties represents a 24 per cent drop from the previous year’s total, but the sector boasts the single biggest deal of 2018 — Bentall Kennedy’s $155.5-million acquisition of a three-building, 395,000-square-foot complex in the Mile End district. Other major deals, reported in a newly released Montreal market overview from Altus Group, include Akelius’ $112-million purchase of adjoining apartment towers in Côte-des-Neiges and the $78.2-million sale of La Centre Sheraton Montréal Hotel to Westmont Hospitality Group.
A $1.2 billion investment in industrial properties surpassed the previous year’s value by $474 million, while the $2.1 billion in multifamily trades was a $388 million or 22 per cent increase over the 2017 mark. Retail investment was 11 per cent higher than in 2017, hitting $983 million.
Altus analysts also paint an upbeat picture on the leasing front. The industrial market is tightest, recording a 3.6 per cent vacancy rate as 880,000 square feet of new space was completed and absorbed during the year. Meanwhile, most of the 1.2 million square feet of space still under construction as 2018 closed out is earmarked for an Ikea distribution centre.
The new office supply pipeline slowed somewhat last year with just 355,000 square feet of space coming onto the market, compared to approximately 2 million square feet in 2017. However, about 2.8 million square feet of office space remains under construction, primarily in the downtown core, and more than three-quarters is already leased. Office vacancy rates slipped below 2017 levels in four of six sub-markets, but are sub 10 per cent only in the downtown.