Photo: James Bombales

2017 was a record year for commercial real estate in Canada, as high levels of consumer confidence drove sales skyward. Many economists are predicting equally good sales in 2018, but the real question is, which cities will benefit the most from the high levels of demand?

According to Morguard’s 2018 Canadian Economic Outlook and Fundamentals Research Report, while major markets like Toronto and Vancouver are expected to continue to perform well, Ottawa, Montreal and Calgary will also see a boom in commercial real estate activity.

“Intense bidding for a limited pool of downtown properties [in Toronto and Vancouver] will force investors to look elsewhere for opportunity,” writes Morguard director of research Keith Reading. “Class A properties in suburban markets, particularly those near transit nodes, will be in high demand.”

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According to the report, Ottawa had a strong 2017 when it came to non-residential construction, and is expected to continue the trend into 2018.

“Sustained progress is forecast for the Greater Ottawa Area retail sector over the near term, in keeping with the recent trend,” reads the report. “The healthy fundamental outlook will attract considerable interest in this market on the part of investors.”

Meanwhile, Montreal had a stellar year in 2017, with strong economic growth pushing record retail sales. Morguard predicts that 2018 will be a booming year for the city, as investors move to take advantage of the strong demand at play.

“A positive performance-driver outlook is indicative of continued progression in the Montreal retail sector over the near term,” reads the report. “Sustained economic growth and job market progress will continue to drive retail sales and expansion activity. The healthy fundamental outlook will draw funds to the sector which will boost investment performance.”

Finally, after a slow past few years for Alberta’s commercial real estate market, things look to be on the up-and-up.

“Calgary will also see increased activity as investors look for high-quality assets in a recovering market and economy,” writes Reading.

Early stages of recovery in the oil sector have been kind to both Calgary’s economy and its commercial real estate market in the past few months.

“Calgary’s retail sector is expected to benefit from a healthier demand-driver performance over the near term,” reads the report. “Sustained economic growth is forecast between 2018 and 2020. The resulting employment and wage growth will support rising levels of retail spending.”

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