The investment landscape has yet to see a dramatic shift in investor activity, as the Bank of Canada looks to moderate the rise in consumer price inflation by implementing a series of hikes to the overnight rate.
- Total sales volume during the first half of the year remains on par with H1 volumes from the last three years with about CAD$2.3 billion in assets traded, year-to-date.
- In the last several months, institutional investors made aggressive moves to acquire industrial and multifamily assets, currently in high demand but short in supply. Private buyers accounted for 58% of total purchaser volume, following a steady rise in net acquisition trends.
- Cap rate decompression is expected in the near-term future as borrowers will find it difficult to secure financing on major commercial properties, as the changing economic climate looks to benefit cash heavy investors. The GoC bond yield hit a 5-year high, up 43 basis-points, year-over-year (YoY).
- Warehousing construction costs are up 52% YoY to a high of $160 per square foot, partly due to the disruptive nature of the global supply chain.