Trending
A red, white, and black flag with a white background.

Commercial sector to become more valuable after COVID-19 – CBRE

A businessman holding a tablet with a cityscape on it.

Acquisition of expansive properties has fallen to the wayside, but commercial real estate is poised to become an even more desirable choice for investment , according to CBRE.

This will be particularly apparent in Toronto, CBRE’s recently released “Q1 2020 Canadian Cap Rates & Investment Insights” document reported.

“With internal operational issues consuming 100% of many firms’ time, new investment decisions have become secondary for the time being,” CBRE said. “Term, covenant and existing financing have become increasingly important across asset classes. These factors will continue to enhance or eliminate liquidity for firms moving forward.

“With risk-free interest rates approaching zero, the real estate sector is poised to be an even more attractive investment option once the markets begin to normalize,” CBRE said.

The Canadian office market is ideally placed to exhibit some of the better performances this year.

“After a strong 2019, the office sector had built considerable momentum going into 2020 and was on track to see robust investment activity prior to the market shutdown brought on by COVID-19,” CBRE said. “Given the strength of office fundamentals entering the slowdown, it’s expected that the asset class will be on solid footing when the economy begins to re-open later in 2020.”

Industrial real estate will also prove resilient against the worst economic effects of the current crisis.

“It’s expected that the implementation of social distancing and quarantine measures should increase demand for ecommerce offerings over the remainder of 2020,” CBRE said. “The critical role of industrial assets in omnichannel and global supply chains is only forecast to increase and will ensure the sector remains well supported by strong fundamentals, especially on a relative basis.”

Post a Comment

Related Articles

The Canadian office market showed signs of stabilization in the third quarter of 2024, according to a CBRE report released in October. Despite a slight...

For real estate investors, selecting the right lease structure helps balance flexibility and stability. Both month-to-month and fixed-term leases have their pros and cons, and...

Most Trending News

The Canadian office market showed signs of stabilization in the third quarter of 2024, according to a CBRE report released in October. Despite a slight...

For real estate investors, selecting the right lease structure helps balance flexibility and stability. Both month-to-month and fixed-term leases have their pros and cons, and...

Consumer expectations for the third quarter of 2024 are mixed. On the positive side, expectations for inflation have eased, while financial stress indicators have improved,...