Canada’s office leasing market showed signs of improvement, with Toronto and Montreal registering positive absorption through the pre-leasing of newly built spaces. Retail leasing activity also grew due to demand among retailers for higher-quality spaces. Investors “exhibited confidence” in the multi-suite residential rental property market during the second quarter, due to long-term fundamentals and a positive outlook for rent growth over the short term.
Canada’s commercial real estate sector experienced positive momentum in the second quarter of the year, according to a report by Morguard. The report revealed a significant increase in industrial property sales and stability in multi-suite residential rental property investment.
Despite a weaker near-term economic growth outlook, real estate investors continue to exhibit confidence in the sector, as evidenced by the uptick in transaction volume in the second quarter. Transaction volumes for industrial investment properties rose by 48.1% quarter-over-quarter across five major markets for properties valued at $10 million or more. However, leasing demand weakened amid rising industrial construction activity, leading to an increase in the national availability rate.
Despite higher interest rates, investor sentiment rose following the Bank of Canada’s 25-basis-point rate cut in June. Morguard expects multi-suite residential rental property markets to continue showing positive performance. Angela Sahi, the president and chief operating officer of Morguard, said that the Canadian real estate market is set to gradually rebound with easing inflation pressures and encouraging signs of rate cuts.
Source: BNN Bloomberg
