Canadian cities expected to become 2018’s commercial hotspots
The Canadian commercial property segment came into the new year flush with the record-high successes of 2017, and a new report from Morguard predicted that five metropolitan markets in particular will enjoy robust strength in 2018.
“There is a high supply of capital ready to be invested and Canadian commercial real estate is a proven performer. We are predicting another very busy and competitive market environment across the country in the coming year,” Morguard director of research Keith Reading said during the release of the 2018 Canadian Economic Outlook and Market Fundamentals Research Report.
The leading markets of Toronto and Vancouver are expected to continue posting good performance.
“Intense bidding for a limited pool of downtown properties [in Toronto and Vancouver] will force investors to look elsewhere for opportunity,” Morguard stated. “Class A properties in suburban markets, particularly those near transit nodes, will be in high demand.”
Ottawa, Montreal, and Calgary will also enjoy accelerated commercial activity. Non-residential construction in Ottawa had a strong 2017, and is projected to continue well into 2018.
“Sustained progress is forecast for the Greater Ottawa Area retail sector over the near term, in keeping with the recent trend,” the report said. “The healthy fundamental outlook will attract considerable interest in this market on the part of investors.”
Montreal’s strong economic growth will keep pushing record retail sales, with investors taking advantage of the strong demand.
“A positive performance-driver outlook is indicative of continued progression in the Montreal retail sector over the near term,” Morguard explained. “Sustained economic growth and job market progress will continue to drive retail sales and expansion activity. The healthy fundamental outlook will draw funds to the sector which will boost investment performance.”
And after several years of relatively sluggish activity, Alberta’s commercial real estate market is expected to hit the ground running in 2018 – largely thanks to economic recovery brought about by better conditions in the oil sector.
“Calgary will also see increased activity as investors look for high-quality assets in a recovering market and economy,” the study noted. “Calgary’s retail sector is expected to benefit from a healthier demand-driver performance over the near term… The resulting employment and wage growth will support rising levels of retail spending.”