Despite multiple global pressures and factors impelling turbulence, British Columbia’s commercial real estate remained in strong demand during the first half of 2019, according to a new market analysis.
In its Mid-Year 2019 Investment Review (British Columbia) data release, Avison Young reported that 85 commercial deals were closed during the first six months of the year, with a total value of more than $2.74 billion.
Total transaction numbers were the third largest on record, behind only the historic levels seen last year (102 deals) and in 2017 (109 deals).
Avison Young said that this was largely thanks to the exceptional performance of the office segment, which accounted for around 70% of the first-half total at more than $1.9 billion. This was spread across 21 sales, including the major Bentall Centre transaction valued at $1.05 billion.
The asset class is expected to draw in substantial volumes for the foreseeable future.
“Investor appetite for office properties in Metro Vancouver, particularly in the core, will remain robust through 2019 with quality assets attracting multiple bids and achieving premium pricing,” Avison Young stated.
Industrial properties led in terms of deals completed with 39 transactions, representing 40% of the total number of sales completed. With a total value of more than $391 million, the property type continues to be one of the region’s strongest draws.
“Significant rental rate appreciation since 2014/15, which has been driven in part by record low vacancy rates, has made industrial assets more appealing to investors, while also providing an impetus for business owners to consider acquiring strata space as opposed to leasing,” Avison Young explained.”
“Industrial deal and dollar volume in the second half of 2019 will likely surpass the results of the first half as a number of sales are expected to close by year’s end.”