Skip to main content
commercial real estate

Cranes litter the skyline and office vacancy rates in Toronto are among the lowest in North America. Canada in 2018 is expected to top last year's blockbuster record in commercial-property deals.Frank Gunn/The Canadian Press

Canada is expected to top last year's blockbuster year in commercial-property deals.

Demand for industrial, land and office space is expected to keep deal activity strong, even though some investors believe Canada's property market has peaked and higher interest rates have made it more expensive to borrow.

Investment in big properties is forecast to hit $43.07-billion this year, according to real estate firm CBRE Group Inc., surpassing last year's $43.06-billion. In 2016, the total value of deals reached $34.7-billion, which at the time was the highest level on record.

"People get a little freaked out at what's going on in the margins. I tend to focus a lot on fundamentals on the health of the Canadian economy," Paul Morassutti, executive vice-president with CBRE, said on the sidelines of a real estate conference in Toronto.

Canada's economy has strengthened and the jobs market is booming. That has helped underpin economic activity in the major city centres of Toronto and Vancouver, where cranes litter the skyline and office vacancy rates are among the lowest in Canada and the United States.

"Are we building too many buildings with not enough demand? Are we putting out debt in an undisciplined way? We are not doing any of those things," Mr. Morassutti said. "The amount of capital out there that's looking to buy Canadian commercial real estate is very strong," he said.

Already, Blackstone Property Partners has announced plans to pay $3.8-billion cash for Pure Industrial Real Estate Trust, which has warehouse space across Canada and the United States.

And the Weston family, which owns the Loblaw grocery empire, plans to pay $3.9-billion to expand beyond retail and create Canada's biggest real estate trust.

CBRE predicts industrial investment to hit $9.3-billion this year, up from $7.4-billion last year. It expects land investment to reach $7.2-billion this year, up from $7-billion in 2017.

Office investment is seen at $9.9-billion this year, compared with $10.2-billion last year, and retail deals are expected to reach $8.2-billion, down from $9.2-billion in 2017, according to CBRE.

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:15pm EDT.

SymbolName% changeLast
L-T
Loblaw CO
-0.92%150.1

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe