-- Report shows Retail and Industrial driving commercial investments due to lack of supply in other asset classes --
Vancouver, British Columbia, April 3, 2014 - Colliers International announced today, the release of their year-end 2013 Metro Vancouver Investment Report. Covering all investment activity exceeding $1 million dollars across the region, The Metro Vancouver Investment Report focuses on investment performance throughout four asset classes: Office, Multifamily, Retail and Industrial, showing that Retail and Industrial investments led the charge in the commercial real estate sector in 2013, due to a lack of supply and availability in other asset classes.
According to the report, although demand is still strong across all assets, Office and Multifamily had far fewer large properties come to market, resulting in lower dollar volume deals. As a result, Retail and Industrial continue to drive the commercial investment market - accounting for over two-thirds of total 2013 sales volume - with Retail reigning supreme over all other markets, at a 31% increase in total sales volume, over last year.
According to Colliers International, mixed-use communities in particular, like the Olympic Village in South East False Creek, are experiencing high demand for retail investment. As the largest single retail transaction to occur in the second half of 2013, the 63,000-square-foot-centre consisting of 12 units sold at a price of $45,100,000.
Other key findings of the report include:
- Office: A drop in dollar values in Office investment in 2013 indicates the lack of large product available in the market that private capital and institutional buyers are currently seeking
- Multifamily: Multifamily investment suffered a decline of almost 30 percent in dollar volume but overall transactions were the same across the region - demonstrating the higher volume of smaller value buildings sold
- Retail: Investment in the Retail region was exceptionally strong in 2013, with a total of 229 market transactions including share sales and more than $1.1 billion in dollar volume
- Industrial: Industrial Investment totaled 184 transactions yielding almost $979 million in sales volume, beating out $897 million in 2012
James Lang, Manager of Market Intelligence at Colliers International, comments, "From the 2013 numbers, we've seen that the demand is still there in all asset classes, but due to a lack of large-scale supply in office and multifamily, the majority of transactions are occurring on small to medium opportunities. With this lack of supply, we predict that we will see more creative deals happening, like buying businesses with real estate assets, forward sales and sales-leaseback."
"Additionally, we believe that many new community plans that are continuing to take shape may unlock some land that could be used to sustain the office, retail and multifamily markets," James Lang adds.
Colliers International believes that until the lack of supply and willingness to let go of property is addressed, commercial investment activity will continue to see similar trends in Metro Vancouver into 2014.
> Download full report in Market Insights section.