Sales of Canada’s office, hotel, and retail properties have reached record-breaking heights last year, fuelled by a strong influx of foreign capital into the nation’s commercial real estate sector.
Latest data from real estate firm CBRE Group Inc. revealed that the portion of commercial property deals (worth $10 million and above) involving foreign investors has increased by 33 per cent year-over-year in 2016, up to $34.7 billion.
The figure exceeded the previous record of $32.1 billion set in 2007, The Globe and Mail reported.
Toronto accounted for S12.2 billion of the commercial real estate transactions last year, up from $10.8 billion in 2015. Vancouver followed suit with $8.1 billion in 2016 ($5.7 billion the year prior).
Observers noted that an increased pressure to find a safe haven amid recent fiscal and political uncertainty will drive foreigners to Canada’s relatively stable markets.
In a recent analysis, real estate company Morguard predicted that investors will be magnetized by the relatively stable yields and robust activity levels in Canadian commercial real estate.
“The financial and technology based economies of British Columbia and Ontario will drive real estate investment,” Morguard stated in its release. “In contrast, markets supported by the resource sector, which have been negatively impacted, are expected to improve gradually over time.”
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