Foreign Investment Continues To Boom In 2013
2012 has remained a stellar year for commercial real estate investors in Canada and despite the recent challenges in some provinces and emerging softness in residential markts in some cities, analysts say the market has never been better and should continue to produce similar returns through 2013.
Thanks to economic troubles abroad and continued strength in Canada foreign investment is likely to continue to boom in 2013. Europe is still in the pit of a crisis with no end to it in sight. The U.S. may have found some better footing but is still balancing on a tight rope walk over the fiscal cliff which could through the country back into the depths of a depression. While it is inconceivable that any party would want that to happen an inability to meet in talks and an expiration of tax cuts would result in complete destruction of confidence in any gains made so far. This would wreak havoc on the U.S. economy as a whole and the nation’s real estate market, while businesses flee.
Even previously hot Asian strongholds like Hong Kong are now seeing cracks which are only likely to widen in 2013. This will force investors all over the planet and especially Asian investors which have become one of, if not the largest and most influential investment force to come to Canada for wealth preservation and yield.
While investment continues to be spread throughout Canada as investors snap up income investments there is no question that Alberta remains the hot zone for growth and high yields.
However, some may not have yet realized how much the Alberta landscape is changing since Calgary took the crown for top returns in 2011. Based on a variety of factors and trends Edmonton is now emerging as the most attractive and buzzing city for commercial real estate investment and is likely to take the lead throughout next year.
Much of the influx of investment capital will certainly head to Edmonton and into retail. This is the A game for investors which is expected to only keep getting more attractive for several years. The unemployment rate in Edmonton is well below the national average as are retail vacancy rates, making the city one of the strongest retail markets in the nation. Retail sales here are expected to climb at least 6.1% in the next 12 months, while cap rates rival the best seen anywhere on the planet.
Now with major development underway to revitalize the downtown area and a new vibrant, fashionable city for visiting and doing business emerging even more global retailers will strive to be a part of it and an affluent crowd of new residents will follow.