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Canada Cap Rate Report Q4 2018

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research article

For real estate investors, finding good deals has become a challenge. Capital is plentiful and pushing up prices on the best opportunities highlights a competitive market. Construction costs have been rising steadily, in step with real estate prices across Canada, and they are likely to get an upward jolt from the escalating international trade battles. As we close on 2018, one clear emerging trend is the need to Canadian commercial real estate to invest in technology; the expectations of tenants are growing more sophisticated as they integrate smart technology into their businesses and lifestyles and demand personalized experiences. Understanding their shifting needs will be critical for the industry in the future.

  • Vancouver: Interest rates continue to remain low and so the appetite for commercial investment real estate – in particular, apartment buildings – remains very strong in the Greater Vancouver area.
  • Edmonton: Edmonton remains a consistent market with strong, well-placed assets garnering investor attention and is expected to have one of the better performing economies in 2018.
  • Calgary: Retail and Industrial assets have remained stable in Calgary, while multi-family assets have shown signs of confidence as investors are willing to accept lower yields on new low-rise construction.
  • Winnipeg: Demand for good quality investment continues to be strong; however, if cap rates do increase due to rising interest rates, expect the multi-family market to be impacted first due to the low spread currently being experienced in the market.
  • Toronto: As the third quarter of the year ends, the GTA investment market remains on pace to set another high-water mark for total dollar volume of sales in 2018 despite the overall number of sales declining year over year. The increase has been aided by strong rental growth and low cap rates for most of the major asset classes.
  • Ottawa: Overall, the last quarter of the year is expected to close out with a number of major transactions similar to what has been witnessed so far in 2018. The soon to be complete Confederation Line will further push development in many parts of the city and help stabilize the retail market.

Real Estate Cap Rate Report Q4 2018

Canada Cap Rate Report Q4 2018

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For More Information, Please Contact:

Oliver Tighe

Executive Vice President

Ottawa

Oliver Tighe leads Colliers valuation team in the National Capital Region. Oliver and his team are responsible for completing commercial appraisal reports and feasibility studies for various commercial property types throughout the National Capital Region (Ottawa / Gatineau) as well as throughout Eastern Ontario. In addition to this Oliver also leads the National Self Storage Practice group which focuses on valuation and consulting for Self Storage all across Canada. Oliver has 15 years experience as a commercial real estate appraiser.

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Mitch Wile

Senior Director

Halifax - Valuation

Mitch has extensive experience in the valuation of major assets for Canadian public companies, REITs and pension funds and advisors. He has a long track record in reporting for International Financial Reporting Standards (IFRS) and has acted as an advisor for IFRS valuations and benchmarking for commercial property portfolios in Canada, the United States, The Netherlands and Germany.  Mitch also provides ongoing support for annual fund valuations to Peter Hihn SV Büro für Immobilenbewertung, a German valuation firm that provides annual reviews for major German Open Market Funds such as Union Investment GmbH and Deutsche Gesellschaften fur Immobilien (DEGI), now Aberdeen Property Investors.

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