Toronto office performance was nearly three times greater compared to Vancouver's
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In its newly released Fall 2018 North America and Europe Commercial Real Estate Investment Review, Avison Young reported that office spaces were responsible for much of Toronto’s – and indeed Canada’s – commercial sector robustness for the first six month of the year.
Toronto was the only Canadian market to register year-over-year sales growth (35%) in this asset class. The city’s office spaces generated $2.7 billion in sales, which was fully 60% of office dollar volume during the first half of 2018.
This activity was greater than the next five biggest markets combined, and nearly three times larger than Vancouver’s $1.1-billion output during the same time frame.
“In fact, Toronto is in good company among North America’s major markets – the only Canadian market to crack the top 10,” Avison Young principal and practice leader Bill Argeropoulos said.
On a nationwide scale, offices magnetized $4.5 billion in investor capital, despite sales activity falling by 16% year-over-year.
“Canadian and international investors continue to view the country in a favourable light,” Argeropoulos stated.
Read more: Toronto’s tech industry is craving more expanses of commercial space
The Avison Young report added that industrial property was also a prominent driver of Canadian commercial activity, with $3.8 billion worth of transactions from January to June 2018.
Both Toronto and Vancouver enjoyed generous windfalls via the sector, with sales nearly doubling to $1.8 billion and $1 billion, respectively.
“In a world of moderating returns, investors are looking to capitalize on landlord-favouring markets and sectors offering significant rental growth – pushing beyond pure-play acquisitions to redevelopment and upgrade opportunities – while debt reduction and geographic diversification continue. For the near term, asset values will remain elevated and cap rates low,” Argeropoulos explained.
