Broadly speaking, investor sentiment remained relatively consistent through Q2 as compared to Q1. The most active sector in terms of capitalization rate movement was the industrial sector, showing modest compression in several markets. Conversely, both downtown and suburban office markets generally saw minimal movement over the quarter, as did the hotel sector. The high costs of owning residential real estate continued to support the multi-family rental market, which also remained relatively flat relative to the prior quarter. Results in the retail sector also proved to be relatively consistent over the quarter, with the exception of a slight uptick in rates for regional centers in some markets.
- Vancouver: While retail continues as a less favored asset class than it was in previous years, Industrial assets continue to remain in demand from both investors and users. Overall, a quieter summer than recent years is anticipated.
- Edmonton: Capitalization Rates have remained relatively stable in Q2, and are anticipated to continue this trend in Q3, although they could be impacted in either direction depending upon oil price fluctuations and/or changes in pipeline construction activity.
- Calgary: Demand for good quality assets remains strong despite a lagging Calgary economy, although investors remain cautious regarding office assets.
- Winnipeg: Demand for good quality investment property in Winnipeg continues to be strong, with cap rates in most sectors holding steady midway through 2019.
- Toronto: The investment market within the Greater Toronto Area ended the first half of the year with few surprises. There was a slight softening seen in some asset classes such as retail and ICI land sales, whereas the highly sought after industrial and multi-residential asset classes saw overall increases in both pricing and volume.
- Ottawa: The second Quarter of 2019 continued the trend of strong performance in the Ottawa Commercial Real Estate market. Throughout the remainder of 2019 we expect to see high levels of transaction activity throughout the market which are anticipated to continue to support the trend of increased cap rate spreads between high quality and low quality assets in Ottawa.
- Montreal: Optimism continues in Montreal’s real estate market in Q2 2019, particularly in relation to the industrial and multi-residential markets, with a degree of stabilization anticipated for the fall.
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