Investments in GTA commercial assets significantly accelerate

Latest figures from Altus Group indicated that in the GTA, total commercial real estate investment has gone up after five consecutive quarters of decreases, with overall investment clocking in at $5.8 billion.

Bolstered by 563 sales transactions valued at over $1 million, the Q2 2019 volume was 43% larger than the level observed during the first quarter.

This was also the fourth highest quarterly investment total ever recorded for the GTA, and will provide ample momentum through the rest of the year.

“Confidence in the GTA market remains high as investors continue to view the GTA as a stable and attractive market, which provides a strong potential for higher returns,” Altus stated in its report.

In particular, re-development sites were hailed as a major driving force, representing almost 38% of all Q2 investment.

The apartment sector provided a significant boost with its 266% increase in investment from the previous quarter, and a 52% increase compared to Q2 2018.

Other heavyweights were the office and residential land sectors, with each accounting for around 20% of the total volume. The largest single transaction during the second quarter was in the office segment, with the $640-million sale of downtown Toronto’s Atrium on Bay.

“Pent up demand and low office vacancy rates (3.1% in downtown Toronto and 6.8% in the GTA for Q2 2019) have resulted in growing demand for office space in submarkets just outside the core.”

The industrial segment, which is at an exceedingly tight vacancy level of 0.8% in the GTA, is also projected to be a powerhouse mover. The asset class had $944 million in Q2 investments, seeing a 22% quarter-over-quarter increase and 20% annual growth.

The retail sector, which was the most traded property type during Q2, enjoyed 25% year-over-year investment growth. “Investors continue to re-position and evolve their retail assets amid competitions with e-retailers by offering more on-site amenities and experiences.”