Things are looking good for Canada’s commercial real estate market. CBRE Canada is calling for a “steady and stable” 2014 while PricewaterhouseCoopers (PwC) assigned an average overall rating of “modestly good” to Canada’s nine largest commercial real estate markets. Forecasts vary depending on the asset class – office, retail, industrial, investment and multi-housing – and market, but as a whole Canada remains “on the radar for new capital investment” thanks to “a lack of volatility in the Canadian economy coupled with steady job growth” according to CBRE.
Retail and office space in particular are predicted to do very well in 2014, keeping in line with the growing trend of “urbanization.” In Toronto, for example, we’re seeing a renewed interest in the urban core from residents who want to eliminate commuting costs and take part in a live/work/play environment.
“The growing attractiveness to investors of developments that respond to this desire leads the outlook for 2014,” says PwC.
Retail giants Home Depot and Walmart are responding by looking for opportunities where they can build up, rather than out. To add to the “retail explosion”, mixed-use office and condo developments with blocks of stores and restaurants at the base are gaining steam. These city dwelling shoppers won’t have far to go for work, although their work spaces are expected to shrink as employers strive to cut costs in new towers that have emerged from Toronto’s building boom.
But with retail and office construction in Toronto on the rise and demand for space high, large blocks of available space are scarce – a good problem for any city to have. Other cities in Ontario are also benefiting from investor demand. CBRE’s senior vice-president and managing director John Haire says, “From an investment point of view, the Region of Durham has become an unexpected hot spot for manufacturing and the inevitable retail and residential growth that is sure to follow.” Vaughan and Mississauga are also expected to continue performing well, thanks to the available industrial space and pro-business mentality.
All of this said, I think it’s safe to say that Canada’s commercial real estate market is thriving and investors will continue to keep their eyes on Canada. Owners of commercial real estate take note, but not before taking steps to certify your site.
The Government of Ontario recently launched the Investment Ready: Certified Site Program, which provides financial and international marketing support for commercial property. Owners can receive up to 50 per cent of their eligible expenses back per site, with a maximum reimbursement of $25,000 per site. Investment-ready sites also benefit from an international marketing campaign aimed at the site selection community, a profile on www.InvestInOntario.com and promotion at key global real estate, site selection and investment attraction events.
A property with an Investment Ready: Certified Site designation is attractive to investors and site selectors because it provides important background information on a site’s availability, utilities, transportation access and environmental record; it encourages faster site selection decisions and can help greenfield or expansion projects get started.
With the commercial real estate market on a roll and a program like this available, it seems like an opportune time for commercial real estate owners.
For more information on the Investment Ready: Certified Site Program, visit www.ontario.ca/certifiedsite.
Azizali Kanjee is broker of record with Inprobus Realty Corporation Brokerage in Oakville, Ont. and chair of the Ontario Commercial Committee at the Ontario Real Estate Association.