The latest commercial real estate statistics suggest that less capital was invested in the first half of 2014 than the previous year. Furthermore, the value of Canadian commercial real estate transactions dipped by 10 per cent in the first half of 2014. Is Canadian commercial property on the decline? The simple answer is no. While the numbers might show a dip, the figures don't actually reflect any lack of liquidity in capital markets or demand. Rather, the numbers reflect the tightness of commercial income property inventory available in Canada. A combination of current landlords choosing to hold onto their investments long-term, in order to retain top yields and value, and private Canadian investors moving to snap up deals. In fact, individual investors have reportedly beaten out large funds in investing in Canadian properties in 2014. So if Canadian commercial real estate is still on the way up and is a great investment, where are the best opportunities for individual investors? Here are 4 Canadian commercial real estate trends and opportunities to watch out for:
- Retrofitting and redeveloping properties to increase value
- Retail and shopping plazas are still expanding
- Edmonton, Alberta is a rising star
- Partnership opportunities for diversification and professional asset management
Contrary to some potential misinterpretation of the numbers; Canadian commercial real estate is alive and kicking. The key is finding the right opportunities among the above four categories.