Toronto impels much of Canadian commercial robustness

The Toronto market accounted for more than one-third of Canada’s total commercial property transactions in Q2 2018, clocking in at $5.7 billion and reaching a historic high in quarterly investment volume.

This was also fully 20% higher than the previous record achieved back in 2013, CBRE Group Inc. stated in its report released at the beginning of this week.

Across Canada, commercial activity in the quarter reached $16.5 billion, which was 38% higher than the previous record set in Q1 2017. On average, the value of each deal was at $9.4 million, up 67% annually.

Year-to-date commercial volume as of the end of Q2 2018 reached a total of $26.8 billion.

Read more: Investment in GTA commercial real estate surges

Vancouver, the next largest contributor to the quarter’s activity, saw more than $3.2 billion in completed deals. This was nearly twice its five-year average. Across North America, both Toronto and Vancouver posted the two lowest office availability rates for 4 quarters in a row, as well as the two lowest industrial vacancy rates for 6 straight quarters.

Activity in the industrial and apartment building sectors was the greatest mover in the quarter, at record-breaking $6 billion and $1.9 billion, respectively.

“Investors want multifamily exposure because it is a good long-term investment strategy,” CBRE president of Canadian capital markets Peter Senst told Bloomberg. “No matter the economic or political state, people are always going to need places to live, which translates to a consistent flow of income for investors.”

“What investors really want today, as we get longer into the cycle, is great real estate that will stand the test of time,” he added. “On top of that, you’ve got term and covenant, so if the market does change, you’ve got something that can pay out dividends for an extended period of time.”

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