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Morguard's 2018 Real Estate Investment Trends to Watch in Canada

Morguard 2/6/2018

Vigorous demand for Canadian real estate assets shows few signs of slowing in 2018

The 2018 Canadian Economic Outlook and Market Fundamentals Research Report released today by Morguard Corporation ("Morguard") (TSX: MRC) predicts another year of robust commercial real estate investment activity in Canada, given healthy demand for quality assets across the country.

"Investors remain enthusiastic about the Canadian commercial real estate market after a record volume of transactions in 2017," said Keith Reading, Director of Research at Morguard. "There is a high supply of capital ready to be invested and Canadian commercial real estate is a proven performer. We are predicting another very busy and competitive market environment across the country in the coming year."

The downtowns of Vancouver and Toronto are expected to remain the most coveted of markets for investment in 2018 but with a limited supply of properties available, investors will be forced to look for opportunities further afield. Suburban Toronto, Ottawa and Montreal are also expected to see strong activity levels in 2018 while Alberta, which had previously depressed country-wide statistics, is also showing signs of reanimation.

"Intense bidding for a limited pool of downtown properties will force investors to look elsewhere for opportunity," said Reading. "Class A properties in suburban markets, particularly those near transit nodes, will be in high demand. Edmonton and Calgary will also see increased activity as investors look for high-quality assets in a recovering market and economy."

In the retail market, the Sears liquidation announcement will put a damper on near-term fundamentals in the country's shopping centres. The departure will be partially offset by a steady stream of new international entrants to Canada. Reading believes the retail market will continue to offer stable long-term opportunity for Canadian investors as malls are being re-envisioned as investors and landlords turn to non-traditional tenants including medical, services, entertainment and government agencies as part of their transformation into community hubs.

"Long term, market-dominant retail centres should be able to alleviate immediate pressure on vacancy by providing prime space to new, high-growth traditional retailers and service retailers," said Reading. "The fact remains that Canada is a country of shoppers, and recent positive economic and employment trends should drive healthy spending growth for the foreseeable future."

With the pace of interest rates hikes expected to remain slow, a continued and abundant flow of low-cost debt and equity capital will power Canadian commercial real estate investment in 2018.

The 2018 Economic Outlook and Market Fundamentals Research Report, released today by Morguard Corporation, provides a detailed analysis of the 2018 real estate investment trends to watch in Canada. The full report is available at www.morguard.com.

About Morguard Corporation

Morguard Corporation is a major North American real estate company. It has extensive retail, office, industrial, multiā€“suite residential, and hotel holdings owned directly, or through its investment in Morguard REIT (TSX: MRT.UN), Morguard North American Residential REIT (TSX: MRG.UN) and Temple Hotels Inc. (TSX:TPH). Morguard also provides real estate management services to institutional and other investors.

For more information, please visit www.morguard.com or follow us on LinkedIn.

Forward Looking Statement Disclaimer

Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words "anticipates," "believes," "may," "continue," "estimate," "expects" and "will" and words of similar expression, constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and regionally; changes in business strategy; financing risk; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted; and other factors. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Publisher does not assume the obligation to update or revise any forward-looking statements.

For further information: K. Rai Sahi, Chief Executive Officer, T 905-281-3800; Keith Reading, Director of Research, T 905-281-3800 or email corporatemarketing@morguard.com


Morguard Corporation; Real Estate Investment