Demand for commercial real estate remains at peak highs as investors search for yield
Canadian Economic Outlook & Market Fundamentals
First Quarter Update 2018
MISSISSAUGA, ON, April 30, 2018 /CNW/ - Canadian commercial real estate activity was off to a strong start in 2018 as demand continues to outstrip supply, according to a new report issued by Morguard Corporation ("Morguard") (TSX: MRC).
"The appetite for commercial real estate investment remains at peak highs, with the flow of capital only being limited by the supply of assets available," said Keith Reading, Director of Research at Morguard. "Investors are seeing commercial real estate in Canada, with its strong track record of performance, as a safe bet for investment."
Unbalanced demand was noted across all asset classes in the first quarter, with the office sector again leading the way. Multi-suite residential and industrial sales also remained brisk, with the shortfall in supply forcing investors to look to smaller markets and second-tier assets. Despite heightened risk due to increased vacancies, retail property values also remained fairly stable.
"Demand is really remarkable across all the asset classes, even those with increasing headwinds," said Reading. "The number of notables sales already closed and in the pipeline is signifying another record year for investment, provided the supply of assets for sale remains available."
Lingering uncertainty over North American Free Trade Agreement negotiations contributed to a slowdown in economic activity, with most global equity markets down to start the year. This uncertainty, paired with rising consumer debt, has the Bank of Canada expected to exercise caution on future interest rate hikes.
"With global volatility in the equity markets, investors are searching for consistent yields," said Reading. "When combined with the Bank of Canada's prudent approach to interest rates, this creates favourable conditions for real estate investment in Canada."
The First Quarter Update of the 2018 Economic Outlook and Market Fundamentals Research Report, released today by Morguard, provides a detailed analysis of the 2018 real estate investment trends to watch in Canada. The full report is available at www.morguard.com.
About Morguard Corporation
Morguard Corporation is a major North American real estate company. It has extensive retail, office, industrial, multi–suite residential, and hotel holdings owned directly, or through its investment in Morguard REIT (TSX: MRT.UN), Morguard North American Residential REIT (TSX: MRG.UN) and Temple Hotels Inc. (TSX:TPH). Morguard also provides real estate management services to institutional and other investors. Morguard's owned and managed portfolio of assets is valued at $21.2 billion.
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Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words "anticipates," "believes," "may," "continue," "estimate," "expects" and "will" and words of similar expression, constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and regionally; changes in business strategy; financing risk; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted; and other factors. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Publisher does not assume the obligation to update or revise any forward-looking statements.
SOURCE Morguard Corporation
For further information: K. Rai Sahi, Chief Executive Officer, T 905-281-3800; Keith Reading, Director of Research, T 905-281-3800