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Even though it was a bit unexpected for some, it’s official, the Canadian office leasing market has started showing signs of recovery. Further even retail is remaining stable and positive, and this holds true also for industrial and multi-suite residential.
All this good news is attracting more investors to invest in Canadian commercial real estate. Furthermore, the increase in domestic demand and with over 60% of Canada’s population fully vaccinated, investors are now even more confident to increase their investments in Canada’s commercial real estate. The second half of 2021 is expected to remain positive with a further boost in investors confidence.
A lot of investors were interested in the multi-suite residential rental sector in the second quarter. Along with increased vaccination and the reduction of restrictions caused by the pandemic, there are more and more foreign students and migrants coming back to Canada.
All of this will lead to a substantial growth of demand for multi-suite residential properties in early fall. Investors are preparing ahead for what is to come, and they know that this market is slowly getting back on its feet.
Even though the economy was growing during the second quarter, commercial real estate investors were still careful. They focused primarily on prime locations with great tenant profiles and stabilized assets.
In the period between April and June, downtown business districts landed lots of renewal discussions. There was an increase in demand for subleasing for the first time since the pandemic started.
The whole retail market is expected to improve throughout the rest of 2021 as more and more workplaces are being reopened and companies are switching back to their regular routines. Investors favored properties that had tenants with necessity services; such as, liquor stores, financial or banking services, and grocery store tenants over non-essential retail tenants.
This growth is very encouraging, especially since there are still many restrictions for both consumers and businesses designed to lower the effects of the new wave of the pandemic. The newest third wave restrictions caused Canada’s economy to contract for one month.
Segments of the economy, such as job growth, is slowly improving but is still lower than it was before the pandemic. As things slowly return to normal, the physical distancing measures may end up requiring more companies to lease larger office space. This is good news for investors. Both office and retail are showing signs of recovery and investment continues to flow that direction, while industrial and multi-suite residential rental also continues to remain popular investment options.
It seems that Canada is slowly going back to normal. Investors realize this, and that’s why they are grabbing the opportunity to invest in retail commercial real estate and be prepared. With the current trends, we only expect that the market improves, especially when restrictions are reduced.