2020 Canadian Economic Outlook and Market Fundamentals Report  

The fourth quarter update of the 2020 Canadian Economic Outlook and Market Fundamentals Report found that the industrial sector of Canada’s commercial real estate remained robust despite the economic slowdown resulting from the pandemic. Healthy levels of multi-suite residential rental property sales were also recorded, as investors looked to the sector as a source of stable income with a positive performance outlook. Meanwhile, the sales pace of office and retail properties was relatively muted given the economic uncertainty as Canadians largely remained working and shopping from home in response to the second wave of COVID-19. Entering 2021, consumer and investor confidence is expected to return, dependent on further developments regarding the COVID-19 vaccine or more effective treatments.

According to the third quarter update of the Canadian Economic Outlook and Market Fundamentals Report, the multi-suite residential and industrial sectors of Canada’s commercial real estate remained resilient despite the economic slowdown resulting from the pandemic. Meanwhile, the office and retail segments witnessed increased vacancy levels in most Canadian cities as restrictions in response to a second wave of COVID-19 kept Canadians working and shopping from home. Entering 2021, consumer and investor confidence are anticipated to return, aligned with further developments regarding a COVID-19 vaccine or more effective treatments.

According to the second quarter update of the Canadian Economic Outlook and Market Fundamentals Report, some segments of the Canadian commercial real estate industry remained resilient. While the office leasing market softened between April and June, the industrial and multi-suite residential segments performed at healthy levels. In the interim, the retail property segment continued to struggle as restrictions imposed due to the COVID-19 pandemic forced non-essential retailers to close. Investors will continue to be selective when acquiring Canadian commercial investment properties over the near term. The uneven economic recovery is expected to begin across Canadian provinces in the second half of 2020.

The COVID-19 pandemic impacted all areas of the commercial real estate industry in the first quarter of 2020 according to Morguard’s first quarter Economic Outlook and Market Fundamentals Research report. Investor confidence and sales were both impacted due to global trade effectively coming to a halt and “non-essential” businesses closing because of the spread of the virus. The strength of the industrial leasing sector continued in the first quarter with the national vacancy rate only slightly above the record-low of a year ago, though the near-term outlook will be impacted. What the road to recovery will look like and how long the industry will feel the effects of COVID-19 are the longer-term questions to consider.

 
2019 Canadian Economic Outlook and Market Fundamentals Report 

In the 2019 Canadian Economic Outlook & Market Fundamentals report, Morguard predicts another year of robust commercial real estate investment activity in Canada, with healthy demand for quality assets. Over the last 18 months, investors placed capital into the market with confidence, resulting in record-high transaction volume. Commercial property investment shows no signs of slowing as investors continue to show interest in core properties with strong tenant profiles across Canada’s major markets – especially as density and repositioning continue to shape the real estate landscape. Morguard's report covers commercial, industrial, multi-suite residential and retail markets. It is published yearly, with quarterly updates to the report. Morguard develops these reports based on our experience in property management, Canadian REITs and property investment.