Toronto’s commercial real estate activity increasing

Avison Young’s winter 2010-2011 Greater Toronto Area Investment Review recorded $7.4 billion in commercial real estate transactions during 2010, nearly double the $4.2 billion recorded a year before. That was especially seen in the retail sector, reversing four years of declines.

“If the first two months of this year are any indication, with more than $1 billion in trades either underway or completed, we are in for a similar if not better performance in 2011,” said Bill Argeropoulos, vice president and director of research for Avison Young in Canada.

Retail was the single most actively traded asset class in the Greater Toronto Area (GTA). With $2.1 billion in retail property sales in 2010, it was a 249% increase from 2009, and surpassed the previous high in 2005 of $1.7 billion.

A key reason was the sale of Erin Mills Town Centre, at a price of $370 million and reported cap rate of 5.8%, to the Ontario Pension Fund.

Office sales were at $1.7 billion, as transactions in downtown remained rare, said the report. It was nearly double the 2009 total of $990 million.

Land, multi-residential, and industrial sectors all showed significant improvements as well in Toronto. Industrial was up 50% from 2009, multi-residential was up 69%, and land sales activity rose 16%.

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