Why Invest In Retail Property In 2014
All sectors of Canadian real estate seem to be doing well from coast to coast. Edmonton and Alberta may be standing out as the top picks by the real estate investment community, but even the Toronto property market is reportedly seeing strong demand.
Below is a brief overview of the trends in the different sectors of Canadian commercial real estate.
Even in Toronto, which was expected to be one of the worst markets in 2013 and 2014, housing appears to be in strong demand, according to The Globe and Mail. Market analysts are even talking about new developments in Toronto to add apartments on top of retail properties. In Alberta, vacancies are low which means many new comers are having trouble finding places to live. The potential downside in the housing market in contrast with retail is tenant quality and longevity.
Alberta’s industrial property sector may be a stronghold for some, but may not offer the growth or predictability ahead as it has in the past. Many Canadian industrial firms have had property locked up for expansion for years, meaning less growth potential ahead. Continued environmental battles also raise many questions about what’s next.
Office has been a pillar of many commercial real estate investors’ portfolios in the last couple of years. While office may have a bright future in Canada, the sector is currently trying to find the right balance between supply and demand. A large part of this issue is guessing where new tech and business trends are taking the office sector and how demand will be impacted long term.
Retail, especially net-leased, appears to be drawing the most demand right now. While for a moment some seemed to expect the brick and mortar retail industry to fall off a cliff thanks to the internet, quite the opposite appears to be true. Canadians love to shop, and young cities have generations with a lot of shopping to do.