Morguard Report Details Real Estate Investment Plans in Canada

In a research report issued by real estate company Morguard Corporation, positive momentum and strong interest in the multi-suite residential, industrial and office asset classes have continued into the first quarter of 2019.

“The performance of multi-suite residential, industrial and office sectors have kept them as favourites of investors,” said Keith Reading, Director of Research at Morguard. “Uncertainty and volatility in global economic dynamics seem to have had little impact on the Canadian commercial real estate business. A sustained momentum from the end of 2018 has kept the investment community confident that these markets continue to represent a relatively safe investment option.”

A combination of international migration patterns and the movement of retirees from single-family homes to the rental market are a result of significant demand pressure for multi-suite residential rentals. Availability rates across the market are projecting to hold at or near record low, and rent rates are expected to be driven beyond the all-time highs.

The research suggests a similar lack of availability will continue to affect the office leasing market as national vacancy came to rest at 11.5 per cent by the end of last March, which is down 40 bps quarter-over-quarter and 100 bps year-over-year.

The downward vacancy trend was exhibited in the downtown areas of Montreal and Vancouver, while Toronto’s vacancy rested at a low of 2.6 per cent.

Morguard Corporation’s report proposes that investment confidence in the market continued with 16.0 million square feet of new supply in development as rent continues to stand at the cycle-highs.

“While the uptick in construction is welcome news for tenants searching for modern office space, the reality is it will be some time before there is significant relief,” said Reading. “Competition for space will remain fierce. Prime development properties are likely to be fully leased – or very close to it – as they near completion.”

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