« Real estate beyond Internet listings | Main | What is RECO? »
Commercial real estate trends
The Canadian commercial real estate market surpassed expectations in 2006. The trend is expected to continue in 2007, but the market could overheat.
For commercial real estate in Canada, 2006 was one of the best years of the last decade, but trouble could be brewing as construction costs escalate, according to The Barnicke Report - Global Views 2007.
Key trends observed by market segment across Canada in 2006 included:
- Office Market - Nationally, the trend was very positive with declining vacancy as a result of positive economic conditions. An emphasis on development continued with a significant increase in office construction activity across Canada; particularly in Toronto and Calgary.
- Industrial Market - While growth in eastern Canada was moderate in 2006, western Canada experienced exceptional expansion in this segment. Availability of land is becoming a key issue across all markets, with corresponding increases in pricing fuelling growth and activity in secondary markets across the country.
- Retail Market - Similar to the case in the industrial real estate market, good locations were in short supply. This was a result of new retailers continuing to enter the Canadian market and e-commerce not leading to the predicted demise of retail, but rather complementing bricks and mortar locations.
"The pessimists who believed 2006 might have troubled times missed out. There is nothing on the horizon that would suggest 2007 will not be another good year for the commercial real estate industry," says Joseph J. Barnicke, Chairman. "However, there is an over supply of dollars for investment, and construction costs are escalating - in some areas up to 30%. If construction costs rise to the point where market rents cannot justify building, there will be added pressure as demand outpaces supply."
The report was produced by J.J. Barnicke, Canada's largest independently owned commercial real estate brokerage.
February 27, 2007 in Canadian Market Forecast | Permalink
TrackBack
TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d8341c51e453ef00d835402fde53ef
Listed below are links to weblogs that reference Commercial real estate trends:
Comments
The comments to this entry are closed.
