MISSISSAUGA, ONT.—According to the Canadian commercial real estate sector showed positive momentum in the second quarter, the multi-suite residential rental property investment remained largely stable due to healthy fundamentals and there was a surge in industrial investment property transactions.
In terms of the rest of 2024, further rate cuts by the Bank of аÄÃÅÁùºÏ²Ê¿ª½±½á¹û2023 and a continued easing of inflationary pressure are anticipated and investor confidence is expected to increase as monetary policy becomes less restrictive.
Investors demonstrated continued confidence in the multi-suite residential rental property market, driven by the sector’s strong long-term fundamental and positive near-term rent growth outlooks. Although borrowing rates remained high in the second quarter, investor optimism increased with the Bank of аÄÃÅÁùºÏ²Ê¿ª½±½á¹û2023’s 25-bps overnight policy rate cut in June, states a release.
Looking ahead, the multi-suite residential rental property market is expected to continue to exhibit stable performance characteristics.
Industrial investment property transaction volume also rose, with sales of properties valued at $10 million or more increasing by 48.1 per cent quarter-over-quarter across five major markets, driving overall Canadian investment volume higher. However, leasing demand patterns softened as industrial construction activity ramped up, leading to a rise in the national availability rate.
аÄÃÅÁùºÏ²Ê¿ª½±½á¹û2023’s office leasing market showed positive progress, primarily driven by pre-leased spaces in newly constructed buildings. Toronto and Montreal registered positive absorption in the second quarter through the pre-leasing of newly built spaces which highlighted the preference exhibited by Canadian businesses for efficient and high-quality office space with access to an abundance of attractive amenities.
“Despite a weaker near-term economic growth outlook, real estate investors will continue to exhibit a measure of confidence in аÄÃÅÁùºÏ²Ê¿ª½±½á¹û2023’s commercial real estate sector as evidenced by the uptick in transaction volume in the second quarter,” said Keith Reading, senior director of research at Morguard, in a statement. “This confidence is expected to persist as the real estate sector gradually recovers from the effects of the most recent economic slowdown.”
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