“Ottawa is increasingly under the spotlight for domestic capital and the rapid growth in pricing experienced in Toronto and Vancouver over the last couple of years has sharpened the relative value the city provides,” Nico Zentil, VP of CBRE Ottawa’s national investment team, said during the company’s inaugural Ottawa Market Outlook event Tuesday. “Investment grade properties in Ottawa, historically one of the most stable markets in North America, provide a 50 to 100 basis point uplift in returns relative to Toronto and Vancouver assets, and that is causing investors to turn a greater critical eye to the city.”
In the past 18 months, Ottawa’s commercial real estate investment has experienced more investment activity and buildings for sale than in the previous five years combined, according to Zentil.
CBRE is predicting 2017 will be one of the top three largest investment years ever, with almost $1.4 billion in transactions forecasted.
With potential record-setting commercial investment possibly in the offing, the knock-on effect on residential housing could be significant.
For its part, CBRE believes Ottawa could be poised to be the next big destination for the tech industry.
“Ottawa has many of the preconditions for success to be the next great urban tech hub: the most educated workforce in Canada, five post-secondary institutions pumping out new talent, an improving downtown cultural scene, growing transit infrastructure and, most importantly, available and cheap office space,” Shawn Hamilton, managing director of CBRE Ottawa, said. “However, the question remains whether much of that vacant space is fit for purpose for the modern tech tenant?
“It’s crucial that landlords work closely with the tech community to understand their unique space requirements. Tech companies have strong aesthetic demands and see the office as an ‘experience’, not just a place their staff gather to complete tasks. The ‘cube farms’ of yesteryear no longer cut it, and today’s tech workforce looks for office spaces which aid collaboration and create a sense of community.
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This year is expected to be a major one for commercial real estate investment in Ottawa.