Asset classes are evergreen investments amid a turbulent global financial system, new analysis says
Demand for commercial properties is soaring across Canada amid economic expansion and stock market volatility, according to RE/MAX.
“With North American stock markets dangerously close to correction, bricks and mortar properties continue to resonate with institutional and private investors, particularly those who are personally vested, across almost every commercial asset class in major Canadian centres,” RE/MAX Canada said in its “2022 Commercial Real Estate Report”.
Demand for industrial, multi-unit residential (especially purpose-built rentals), and farmland was found to be “unprecedented” in Q1 2022 as their values reached record highs. And despite some prolonged sluggishness during the pandemic, retail and office asset markets are starting to exhibit signs of growth in multiple regions, RE/MAX said.
“Extremely tight” commercial segment conditions were registered in 92% of the markets surveyed by RE/MAX, while 67% encountered difficulties in leasing industrial space. Markets where leasing challenges were apparent included Vancouver, Edmonton, Calgary, Winnipeg, Ottawa, the Greater Toronto Area, Hamilton-Burlington-Niagara, and London.
“Some realtors are recommending tenants start their search for new premises at least 18 months before their current leases come up for renegotiation,” RE/MAX said.
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On the other hand, suburban office space continues to exhibit its worth, proving “exceptionally resilient” in 67% of markets including Vancouver, Calgary, Saskatoon, Winnipeg, Hamilton-Burlington-Niagara, Ottawa, Halifax-Dartmouth, and Newfoundland-Labrador.
A similar proportion (67%) continues to champion development land, especially in Vancouver, Calgary, Regina, Saskatoon, Winnipeg, Ottawa, the Greater Toronto Area, and Halifax-Dartmouth.
Retail assets are showing resurgence in 75% of major Canadian markets (nine out of 12), “with strong emphasis on prime locations in neighbourhood microcosms,” RE/MAX said. The trend was apparent in Vancouver, Edmonton, Calgary, Saskatoon, Regina, Winnipeg, Hamilton-Burlington-Niagara, Toronto, and Ottawa.
