Forget the residential market, maybe it’s time we started focusing on how strong Canada’s commercial real estate market has been, says Sonya Gulati, an economist with TD Bank.
“The commercial side of the market has recorded quite a comeback from the troughs posted in the early part of the recovery,” said Ms. Gulati in a report.
The economist notes $21-billion in commercial real estate assets sold last year, up from $10-billion in 2009. She says the short supply of projects coupled with demand has caused most regional markets to tighten over the past 12-18 months.
“The tighter conditions would lend itself to a new round of projects. We are already seeing development intentions materialize — there are renovation plans in major shopping mall centres across the country and there are an elevated number of new office towers being built,” says Ms. Gulati.
Toronto is expected to add four million square of office space over the next three to four years and there should be more to come due to steady economic gains in Canada that, combined with low interest rates, have combated global financial uncertainty.
“Thus, after a modest tightening for much of 2012, we forecast that Canadian commercial real estate is primed for growth,” says Ms. Gulati.
She says the “wild card” for the second half of 2012 will be consumer and business confidence in the face of the risk-filled economic climate.
“With demand elevated post-recession and many developers waiting to see if global risks abate, most property classes (office, retail and industrial) remain fairly tight. To help ease this pressure, we anticipate a new construction cycle will take place over 2013-14,” she says.
Source: http://business.financialpost.com/2012/07/12/canadian-commercial-real-estate-is-primed-for-growth-td-economist-says/
No comments:
Post a Comment