Vancouver Investment Commercial Industrial Real Estate Sector Getting Strong Vote of Confidence from Investors
A recent Newswire.ca news release contained some strong numbers for commercial real estate investment across most major Canadian markets. Commercial real estate sales in dollar volume in Canada has already surpassed the 2009 total. The strong activity has largely been driven by a healthy demand for retail space and an active REIT (Real Estate Investment Trust) sector.
By the end of the third quarter this year, over billion in commercial real estate will have changed hands in Canada, up over 57% for the same 9 month period the previous year.Toronto has been the most active market while Vancouver has been the most expensive (with an overall capitalization rate of 6.12% and falling.)
Bill Ageropolous, VP and Director of Research for commercial real estate broker Avison Young comments that
" Compared to last year, the results to date are a welcome sign that the commercial real estate investment market is gaining traction in Canada," continues Argeropoulos. "This upswing is attributed to a number of factors, including stable and improving market fundamentals, historically low borrowing costs, high availability of debt, a narrowing bid-ask gap and the emergence of REITs as active buyers." Ageropolous added that cap rates may continue to drop from those buyers venting their frustration at being previously shut out of the market and now have the capital sitting on the sidelines ready to deploy.
Vancouver Avison Young Principal Mike Gill commented that ""the recent influx of foreign capital from Europe, the Far East and the Middle East, together with competition from local investor capital, has applied further pressure to already declining cap rates for the premier assets".
It looks like condos and houses are not the only real estate assets whose prices are being affected upwards by Asian foreign investment.