Latest results indicate that 1.5 acres of land and air in downtown
Toronto worth as much as 94 sprawling acres in the suburbs.
TORONTO, Aug. 7, 2014 /CNW/ - As we sail past the mid-way point in the
year, the numbers for Q2 commercial sales activity in the Greater
Toronto Area (GTA) are in. The quarter ending June 30th showed slight softening from the previous quarter driven by the number
of large deals closing in the quarter ending March 31st but together, the first two quarters of 2014 represent the second best
Q1 and Q2 results in the past ten years reaching $6.9 Billion in
"The decline in the dollar volume activity in the second quarter was
more a function of the lack of larger transactions that were present in
Q1 of 2014", noted George Carras, President of RealNet Canada Inc.
While the sales activity show a decrease in overall dollar value, the
number of transactions over $1 million surged to 497, totaling $2.6
The commercial market continues to be stoked by institutional investors,
REITs, Pension Funds etc. who have the financial assets and mandate to
build their portfolios. This combination has made for a very
competitive acquisition landscape, and compressed cap rates. This is
largely seen in the western reaches of the GTA, where the industrial
market accounted for more than a third of GTA industrial activity - a
very active segment with $600 million in total activity.
As we look at the Q2 sales activity from RealNet® to see where the gains
were this quarter, the land sectors saw gains compared to a year ago.
The land sector with the greatest increase was Residential with a 29%
year-over-year increase with two opposing examples driving the
marketplace. In Milton, 94 acres of residential land sold for $55
million driven by the continued consumer demand for residential
inventory west of Toronto while in Toronto's downtown core, 1.408 acres
sold for $53.5 million. "These two transactions show that vertical
development continues to be the focus of urban Toronto growth and that
our Toronto air is worth as much as raw land in suburban Toronto," says
Lucie Piazza, National Commercial Manager at Royal LePage Canada.
"When I talk to our commercial agents focused on land sales, their
sentiment sometimes sounds similar to those focused on investment
sales," says Piazza. "We have the buyers ready to buy, the challenge is
finding good product. This sentiment isn't anything new and proves we
continue to see strength in the market."
So, what will Q3 bring us in the commercial market? We anticipate
continued strength in the GTA commercial market as Canadian investors
continue their focus of long-term investment strategies. Canada's
commercial figures continue to tell of a burgeoning market, with
promising signs of strength in the period to come.
Royal LePage Canada
For over 100 years (1913 - 2013), Royal LePage has been, and continues
to be, one of the most widely recognized and well-respected real estate
brokerage brands in Canada. In its 100th anniversary year, Royal LePage
Commercial was re-launched by Royal LePage (a wholly-owned subsidiary
of Brascan Asset Management). The inspiration for the re-launch dates
back to the time Royal LePage Commercial Inc. was separately
incorporated from its residential division in 1984. It charted
the landscape for the development and growth of the Canadian commercial
real estate industry and quickly grew to become the premiere, full
service brokerage across Canada. It gained an excellent reputation both
nationally and internationally, and became the brokerage of choice for
many of Canada's real estate stakeholders, A-list tenants and
RealNet Canada Inc.
Founded in 1995, at a time when distress transactions and lack of
capital defined property markets, REALNET® has used market intelligence
and insights to transform the Canadian property market into one of the
most highly regarded and trusted in the world - by focusing
unwaveringly on enabling better informed client decisions. In
commercial investment markets in the Greater Toronto, Golden Horseshoe,
Calgary and Vancouver markets, and in residential development and new
homes markets in the Greater Toronto and Golden Horseshoe, REALNET® can
empower you the way it empowers more than 45,000 professionals across
Canada. Start with better research and let the unique REALNET® platform
of market analysis, insights and world-class systems and tools allow
you to be better informed and well connected.
SOURCE: Royal LePage Canada
For further information:
National Manager - Commercial
Royal LePage Canada