Q2 CRE Investments Update

The value of Greater Toronto Area (GTA) commercial real estate transactions hit a record $13.2 billion in the first half of 2021, an increase of 68 per cent over last year.

Some things to note:

Land is still a top priority

With fewer disruptions and less uncertainty in the market than there was a year ago, development has picked up significantly. Sales of residential land and lots, combined with industrial, commercial and investment land, topped $6.7 billion and represented 51 per cent of total investments.?

Industrial spaces and apartments maintain strong interest

As availability remains tight, industrial assets continue to be highly sought by investors. Single and multi-tenant properties, as well as industrial land, are all in demand.

While new industrial buildings and warehouses with high ceilings are in demand by large users, smaller buildings with lower clear heights in Etobicoke and Scarborough are also popular to meet e-commerce logistics needs and enable deliveries from areas close to consumers.

Retail and office spaces are catching up

Considering the spread of the Delta variant and an increasing number of COVID-19 cases, the expected return to offices seems likely to be delayed and uncertainty will remain in the sector. However, some office product is selling in urban areas for a low cap rate and isn’t based on existing needs, but potential redevelopment down the road in three to seven years.

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