Canada Cap Rate Report Q4 2018

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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.

Canada Cap Rate Report Q4 2018

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Oliver Tighe

Executive Managing Director | Ontario Region

Ottawa

Oliver Tighe leads the Commercial Appraisal Division in Ottawa for Colliers International. Oliver is responsible for the development and management of Colliers Valuation & Advisory Services Division in the National Capital Region. The Ottawa Valuation & Advisory Team offers extensive expertise in a variety of real estate assets. Current staff includes two AACI designated appraisers and three candidate appraisers. We can handle assignments on single and multi user industrial, office and retail facilities as well as  lands and multi-family assets.  The team also has extensive expertise working with special use assets such as places of worship, self storage facilities, hotels, hospitals and recreational facilities. Colliers VAS Ottawa is available for all of your real estate appraisal and consulting needs. We complete high quality appraisals with short turn around times for competitive fees. We are also on all lenders approved appraiser lists and can deliver reports in as little as two business days.

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Mitch Wile

Managing 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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