Investment in GTA commercial real estate surges

The second half of the year might not prove as active, however

Investment in GTA commercial real estate surges

Aside from a continuously robust housing market, the Greater Toronto Area also plays host to a flourishing commercial real estate segment that saw a total investment value of around $5.6 billion in the second quarter of this year alone.

In a new study, the Altus Group reported that the GTA continues to magnetize investment in its commercial properties, with a total of 574 investment property sales transactions valued at over $1 million in Q2 2018.

This brought the total investments for the first half of the year to $11.3 billion, representing a 6% annual gain over the record-breaking first 2 quarters of 2017.

Residential land recorded a total of $1.5 billion in Q2 2018 investments, while ICI land saw $1.3 billion. Together, these accounted for 50% of the total capital flows for the quarter.

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However, Altus warned that “despite the amount of capital focusing on commercial real estate and due to a lack of available investment product, investment activity is likely to be below 2017.”

Reticence will likely characterize GTA investment activity for the remainder of the year, the report stated.

“Investors will continue to move cautiously and remain selective in the bidding of assets as investment product remains limited, especially core assets,” Altus concluded. “Regulatory and lending policies as well as trade disputes may cause some uncertainty surrounding the economy, leading investors to be more selective with their acquisitions.”