Commercial real estate investments in the Greater Toronto Area (GTA) hit a record high in the second quarter of 2013.
Office, industrial and retail properties, along with a number of portfolio transactions, propelled commercial real estate investment sales to reach a new record level of $4.5 billion, according to a recent report by Avison Young. Although capitalization rates remained low, the compression rate appears to have moderated between quarters for some property types.
“Clearly, the recent performance is no indication of a slowdown in the sale of commercial real estate properties,” says Bill Argeropoulos, vice-president and director of research at Avison Young Canada. “Investors continue to look for ways to strategically deploy capital across asset type and geography, with properties transacting in both the open-bid market and in off-market scenarios.”
According to the report, overall investment sales volume across the GTA reached $4.5 billion between April 1 and June 30, eclipsing the previous peak of almost $4 billion in the fourth quarter of 2006. This year’s second quarter (Q2) results were $2.4 billion higher than those in the first quarter, and almost $1 billion higher than Q2 of 2012. As a result, the total investment sales volume year-to-date in 2013 stands at $6.5 billion – a 15 per cent increase in comparison to the first half of 2012.
The Canada Pension Plan Investment Board and the Ontario Pension Board were on either end of the largest single office asset sale. Meanwhile, GE Capital Real Estate, Greystone Managed Investments, Slate Properties, KingSett Capital, Primaris Retail REIT and Dundee REIT were on either ends of portfolio sales.
