- Investors maintained confidence in
Canada's multi-suite residential rental property as the sector continued to be a popular acquisition target. - Owner/users were drivers of industrial property sales in keeping with the recent trend.
- Canadian office leasing market performance was bolstered by the pre-leasing of new supply.
- Retail leasing market conditions stabilized with new retailers identifying opportunities and existing retailers eyeing expansion.
"The Canadian commercial real estate sector in the first quarter has shown positive signs of market resilience," said
Looking ahead, the
"The ongoing high interest rates continue to impact the real estate market, leading to increased costs of debt and widening of the gap between seller and buyer price expectations," said
In the first quarter, Canadian multi-suite residential rental emerged as the second most popular acquisition target of investors, continuing the trend seen over recent years. Notably, smaller-scale properties sold to private groups have accounted for a large share of investment sales activity while institutions and pensions funds have increasingly sought acquisitions outside of
Due to an availability shortfall, there have been few sales of large over the past year. Just over
Industrial property led in investment property sales, while overall capital flow into the asset class slowed quarter over quarter. Owner/users accounted for a significant share of industrial property sales in the first quarter, in seeking to capitalize on the financial advantages and control attainable through ownership. At the same time, private capital groups capitalized on reduced competition levels. Industrial leasing fundamentals were relatively stable and healthy, as new supply and sublease offerings drove availability rates higher.
The office leasing market performance was bolstered by the pre-leasing of new supply in the face of a slight increase in the national vacancy rate and downward pressure on rents. Both
Retail leasing fundamentals remained stable during the first quarter, with vacancy levels generally flat. While space in prime locations was limited, vacancy levels stayed elevated in certain downtown cores. Overall, supply and demand were balanced as new retail concepts sought opportunities to enter the market while stores selling necessities and discounters aimed to expand.
The Canadian economy displayed stronger-than-expected growth in early 2024 driven in part by population growth, an uptick in household and government spending, and rising residential housing demand. While consumer price growth slowed during the first quarter of 2024 as pressure eased in the grocery sector in both January and February. Inflation remained elevated due in part to persistently high rental costs mortgage interest rates.
The
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