Canada’s commercial real estate market had a stellar year in 2017 and this year could be even better.
A new report from CBRE says that last year saw $43.1 billion in investments in Canada’s CRE, smashing the record of $34.7 billion set in 2016.
Canada was one of just four countries to set a new record high and the report suggests that “the market has the potential to defy traditional market cycles” and set a fourth year of record-setting transaction volumes.
Among the key trends the firm sees in 2018 are record high sales prices for offices, especially in Toronto and Vancouver; and record high leasing rates as demand remains high amid declining vacancy rates.
Such will be the demand, CBRE believes that builders will confidently begin new developments with minimal or no pre-leasing; and tenants will be forced to be flexible, creative and “shift their real estate expectations to reflect new market realities.”
A variety of markets across Canada will see new records for land pricing.
The report says that Canada is in demand but highlights some risks to the growth of CRE. These include rising interest rates, tighter underwriting, and inflation.
Overall, the report says that Canada will retain its “moment in the spotlight” in 2018.
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