Small investors spark to commercial properties

Property values in the sector are expected to rise 20% this year in Calgary and about 10% in Toronto and Vancouver as low vacancies encourage landlords to raise rents, according to Property and Portfolio Research Inc.

Montreal values are expected to gain four per cent. Office vacancy rates in Canada amid economic growth led by the oil and natural-gas industries.

Egging on investor interest is demand for commercial property stemming from the nearly 16% return last year.
Real estate investment trusts have garnered much of the attention.

As a group, they’re estimated to be in line for a 15% to 25% this year. A limited number of new construction projects is also a bit contributor to those level of returns.

More and more small investors are looking at REITs as a simpler alternative to direct ownership and management of small mixed-use and commercial properties.

Still, the appeal of the traditional model is very much alive and well, said Tahani Aburaneh, author of Real Estate Riches: A Money-Making Game Plan for the Canadian Investor.

“Oh, investors still want to own their investments,” she told CREW. “If anything, they are growing in number.”

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