Canadian commercial real estate investments reach $43.1 billion

CBRE Group predicts 2018 could be another record investment year across the country. And vacancy rates in Calgary should stabilize

Mario ToneguzziThe Canadian commercial real estate market in 2017 was very strong, with just over $43.1 billion in investments, according to CBRE Group.

CBRE, a commercial real estate and investment company, says that for the second year in a row, the industry set a record.

And CBRE is forecasting a potential record year again in 2018.

Its 2018 Real Estate Market Outlook Report predicts “strong tenant demand, coupled with declining vacancy rates, which are at, or near, all-time lows in multiple Canadian markets, will lead to strong increases in rental rates. So, despite questions about the length of the upswing in Canadian commercial real estate, CBRE projects historically-strong market fundamentals will again improve in 2018.”

In 2016, total investment hit $34.7 billion.

“As a result of this surge in investment activity, Canada was one of only four countries around the world to set back-to-back investment records in 2017. The report forecasts that 2018 could see the market set a historic treble of consecutive investment records, with investors continuing to flock to the asset class as a stable, high-yielding investment vehicle,” said CBRE.

The company said Toronto and Vancouver started 2018 with the lowest downtown office vacancy rates in North America at 3.7 per cent and five per cent, respectively. CBRE forecasts that vacancies will fall even lower in those markets, to 3.3 per cent in Toronto and 4.9 per cent in Vancouver this year.

After surging for the past two years, vacancy rates will finally stabilize in Calgary as the recovery in Alberta starts to take hold, it said.

Calgary’s downtown vacancy rate was just north of 25 per cent, according to several real estate companies.

Click here to read the full CBRE report.

Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

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