Canadian Commercial Real Estate on the Rise

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The U.S. isn’t the only commercial hotspot these days… Vancouver and Toronto have also become quite attractive to global investors.

Thanks in large part to China’s less stringent investing regulations and its cooling property market, many investors have continued to pour into global commercial real estate hot spots, including Canada.

In fact, over the last six months, Canadian commercial real estate has skyrocketed 143% to $1.85 billion, thanks in large part to those Chinese investors.

And there are no signs of this trend slowing, as Canadian real estate remains a stable performing asset…. Especially with historically low interest rates, and a low Canadian dollar likely to fuel further interest in commercial property.

Anbang Insurance, which bought the Waldorf Astoria in New York City for $1.9 billion is buying what amounts to a 66% stake in all four towers of the Bentall Centre – a 1.5 million square foot complex with retail right in the heart of Vancouver.

That’s the same group that just paid an incredible $110 million for a land lease of the HSBC Building in Toronto…

There are no signs of slowing interest either.

In fact, the CBRE Group just forecast $23.6 billion in total deals in Canada, as foreign buyers look for stability in such volatile markets.

"Foreign capital should be very active in Vancouver, very active in Toronto this year and currency absolutely is the icing on the cake," Mark Renzoni, chief executive officer of CBRE in Canada, as quoted by Bloomberg.

Investment in Toronto, for example, just hit its highest point since 2007 at just under $1.1 billion. Many of the deals took place as the currency decline sped up.

Even Vancouver is hot these days.

One of the area’s most prominent office towers – the 589,000 sq. ft. Royal Centre -- was just sold for $285 million.

Despite reports of a slowdown in commercial real estate, we don’t see it.