Photo: Shaheen Karolia/Flickr
The head of a major Canadian real estate investment trust doesn’t expect demand for commercial property in Toronto to abate any time soon.
“The outlook in the next 24 months for Toronto office demand in my opinion is very, very good. There’s even a shortage [of leasable office space] in certain areas of the city,” says Michael Emory, CEO of Allied Properties REIT.
That was among the predictions for Canada’s commercial real estate market Emory shared on BuzzBuzzNews’ Facebook Live broadcast this week.
Speaking nationally, Emory says the election of Donald Trump as president could spur further interest in Canada’s commercial segment from investors who would have otherwise put their money stateside, echoing comments from CIBC Deputy Chief Economist Benjamin Tal.
“Certainly post-Brexit, there was a discernable flow of funds into Canada because of its, perhaps, safe-haven status, and it’s not unreasonable to think that post-the current election in the United States we may see a similar flow for the same reasons,” Emory tells BuzzTV.
“But only time will tell because nobody really is confident in anticipating what’s going to happen in the United States of America in the next 24 to 48 months,” he laughs.
For the past two decades or so, urban intensification has been driving both the office and retail real estate segment in Toronto — today “one of the strongest office markets in North America” — and other major Canadian cities, says Emory.
“Since the mid-1990s, people have been choosing to live, work and play, for the most part, in the inner cities as opposed to the broader suburban areas,” he explains.
This continues to play out at a time when changes are brewing in the way office tenants and retailers operate. “There’s a whole movement underway towards curated retail space that transforms almost on an ongoing basis,” Emory continues.
The CEO of Allied, which has holdings across several large Canadian cities, says this will “absolutely” change the way landlords lease out commercial spaces, offering more flexibility for tenants such as pop-up shops.
Allied is looking at a flexible “market” format for the future retail offerings at The Well, a Toronto mixed-use project it continues to plan with Diamond Corp. and RioCan REIT after deciding to sell half of the residential component to Tridel and Woodbourne this summer.
“The old suburban notion where you needed a certain floor-plate size and massive amounts of parking simply is not achievable in the inner city,” Emory explains.
Watch this week’s BuzzTV Facebook Live segment featuring Emory below.