Commercial sector healthy but not everywhere

Two reports show some disparity in the commercial real estate market.

Colliers International says that capitalization rates remained relatively healthy in the third quarter of 2015; its figures measure the rate of income return as a percentage of a real estate investment.

“Despite weak energy markets and a slowing Canadian economy, demand for good-quality, well-tenanted assets remains strong, particularly in Toronto, Montreal and Vancouver,” says Chris Marlyn, senior vice president of Colliers’ Valuation and Advisory Services team.

However, the Toronto Real Estate Board reports that there was a drop of 18.9 per cent in the amount of space leased in the city in the third quarter compared to the same period in 2014. There was 4.8 million square feet of space leased.

Total industrial, commercial/retail and office property sales amounted to 230 in Q3 2015 – down by approximately 32 per cent compared to 336 sales in Q3 2014. The number of sales were down for all three market segments.

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