Tuesday, September 24, 2019

Commercial real estate

What is commercial real estate?


The 10-year bull market in the Canadian commercial real estate sector extended in 2018, supported by the lowest unemployment rates in at least four decades. For several months, the absence of a friendly trade agreement with the United States was a destabilizing factor on many fronts, but the possible United States-Mexico-Canada (T-MEC) agreement eliminates part of the doubt. Meanwhile, new federal and provincial measures appear to have stabilized the housing market.

"Conflicts in 2017 and 2018 have led to supply restrictions in the middle of a maturing cycle of the commercial real estate sector in Canada," says Bill Argeropoulos, partner, and head of Practice, Research (Canada) for Avison Young. "The activity is expected to remain stable in 2019, with a general restriction of the offer being the main brake on the growth of the real estate market. On the other hand, tenants and controlled owners that accelerate technological advances during a period of moderate economic growth."

According to the report, Canada's office sector remained firm in 2018, although weakness persisted in Alberta. Competition for office space, especially in markets in city centers, continues to point out the fundamental parameters of the sector at the national level. Vacancy in offices declined in almost all markets, with which the Canadian average fell 11% towards the end of 2018. In 2019 a similar story is expected, although a slight increase in vacancy is observed up to 11.3 % towards the end of the year after construction will almost double in 2018.

Argeropoulos notes: "Toronto and Vancouver reaffirm their presence among the best performing office markets in North America and Canadian markets captured five of the 10 lowest vacation rates on the continent."

The report highlights that Canada's industrial markets are characterized by a low single-digit vacation. Overall, industrial vacancy decreased, decreased to a new low record of 2.9% towards the end of 2018, with the expectation that it will fall further in 2019. Toronto (1.3%) and Vancouver (1.5%) registered The lowest holiday rates in North America in 2018 and are predicted to be ranked among the three markets with the most tight situation in 2019.


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