Estate Investment Trends to Watch in Canada in 2019
Today, Morguard Corporation
("Morguard") (TSX: MRC) released its 2019 Canadian Economic
Outlook and Market Fundamentals Report. The report, Morguard's 21st
annual edition, states that activity levels and consumer appetite for quality
Canadian real estate assets steadily increased in 2018, with strong indications
for a positive outlook for 2019.
The full report, with regional
insights and video, is available on Morguard's website at morguard.com/research.
"Canadian commercial real
estate has proven to be an attractive asset class for various investment groups
recently, a trend that will continue into 2019," said Keith Reading,
Director of Research, Morguard. "Over the past 18 months, investors placed
capital into the market with confidence, resulting in record-high sales volume.
The market shows no signs of slowing, as investors continue to show interest in
core and core-plus quality properties with strong tenant profiles in Canada's major
urban centres – while site intensification and repositioning opportunities
continue to shape the Canadian real estate landscape."
The multi-suite residential
asset class posted a record-high flow of capital in 2018, a trend that is
expected to carry over into 2019. The national vacancy rate is expected to hold
at or near the cycle low, resulting in modest upward pressure on monthly rent
averages. Demographic shifts, housing conditions and migration patterns will
continue to boost rental demand, while low levels of new construction activity
will provide little relief from the shortage of vacant units available for
prospective renters. Healthy fundamentals will make the multi-suite residential
asset class very attractive for investors in 2019.
For the office asset class, the
mature phase of the cycle was extended, resulting in a record high pace of
investment during much of 2018. Industrial property investment trends were also
generally bullish, as the asset class placed first in terms of market performance
during 2018. Morguard's 2019 outlook for the office and industrial asset
classes is positive, with demand outstripping supply in most of Canada's urban
Retail investment property
sales also hit a record-high in 2018, despite heightened risk in the broader
industry and fairly mixed leasing performance. While retail sales growth
continues to moderate, properties with development or repositioning potential
are expected to generate strong interest among the investment community looking
ahead to 2019.
Canada's economy is forecast to
expand at a fairly solid rate, which will translate into continued labour
market progression and increased consumer spending. Sustained economic
expansion over the next few years bodes well for the Canadian commercial real
estate sector as a service provider to the economy. Canadian commercial
property sales activity will remain robust over the near term, against a
backdrop of positive overall sector performance.
The 2019 Economic Outlook and
Market Fundamentals Report is a detailed analysis of the 2019 real estate
investment trends to watch in Canada. The full report, including regional
analysis, is available at morguard.com/research.
About Morguard Corporation
Morguard Corporation is
a major North American real estate company. It has extensive retail, office,
industrial, multi–suite residential, and hotel holdings owned directly, or
through its investment in Morguard North American Residential REIT (TSX:
MRG.UN), Morguard REIT (TSX: MRT.UN), and Temple Hotels Inc. (TSX:TPH).
Morguard also provides real estate management services to institutional and
other investors. Morguard's owned and managed portfolio of assets is valued at
$21.6 billion. Please visit morguard.com
or follow us on LinkedIn.
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