In 2015, we saw an influx in the purchase and development of mix-used facilities, particularly in strong urban centres like Toronto, Montreal and Vancouver, our Canadian dollar rise and fall to the US dollar, and the shutting down of oil companies in Western Canada. How does this set up the Canadian Commercial Real Estate industry for 2016?
According to PwC and Urban Land Institute’s report on Emerging Trend in Real Estate 2016 (R), the Canadian Commercial Real Estate industry is poised for transition. As a result of our low oil prices and low Canadian dollar, exporting to the US and other foreign countries is likely going to rise which could lead to an over 3% growth in demand for manufacturing, transportation, warehouse and fulfillment centre facilities here in Canada from local and foreign investors. Mixed-use development projects that began in 2015 will continue development in 2016, but the 2015 influx of office and mixed-use developments combined with businesses’ varying responses to the changing economy has led to an increase in office space vacancy. This means that the real estate owners of those developments will be focused on doing whatever it takes to have those vacant spaces filled, even if it means converting parts of their mixed use facilities into medical care or retirement home facilities to meet the growing needs of our aging baby boomer population.
In the meantime, some of our larger Canadian Commercial Real Estate companies are looking beyond the Canadian border for investment opportunities. For some, it is to increase their portfolios and have a bigger footprint in the international commercial real estate industry. For others, it is to take note of the ever growing trends in the foreign markets that could eventually become quite evident in our Canadian market. For example, different parts of the US are seeing an increase in restaurant and bar sales frequented by individuals that are on average 25yrs and up. This trend forecasts an increase in demand for urban space clusters by a millennial generation that are up and coming decision makers with a desire to be more mobile and live in urban clusters that are in close proximity to where they work and play….”
Our Canadian commercial real estate industry may not be as poised for exponential growth in 2016 as it has been in previous years, but it is in a position to allow new opportunities for growth in markets that have not previously shone in the Canadian economy.
DJ Mcgauley and Associates Inc. is your Office Space Planning, Renovations and Relocation Project Management Company of Choice for the Toronto, GTA and surrounding areas. If a renovation or relocation of your 2,000 – 25,000 sq.ft. office space is in your plans, contact us to arrange a no-obligation site meeting. We guarantee that by the end of that meeting, you will know all that would be required to make your office renovation/relocation project a successful reality.
PwC Canada, Emerging Trends in Real Estate(R) – Canada and United States 2016, 2015 December 31, http://www.pwc.com/ca/en/industries/real-estate/publications/emerging-trends-real-estate-canadian-summary.html
McLean, Steve, Real Estate News Exchange, Property Biz Canada, Real Estate Forum – Strategic Thinking for 2016, 2015 December 8, http://renx.ca/strategic-thinking-2016/