GTA sees strong investment sales in the first quarter of 2018

By Steve Randall

Total investment in Greater Toronto Area property jumped 29% in the first quarter of 2018 compared to a year earlier.

That meant a total of $5.7 billion was invested through 565 transactions according to data from Altus Group.

The office sector saw strong activity, posting its second-best quarter ever with $1.7 billion invested. This was driven by sales of three properties in the downtown/downtown periphery totaling $1.2 billion.

The Altus Group Investment Trends Survey shows that investor intentions remain strong with cap rates remaining at low levels and continued cap rate compression in the downtown AA office market.

Residential land sales were also strong at the start of 2018 with a 10% jump in transactions year-over-year, to make the third highest quarter on record.

There were also increases for industrial, retail, and apartment asset classes compared to a year earlier. The data shows that activity was driven by local investors across all price levels. Institutional investors were mostly interested in selected, high quality, office sector transactions.

“Despite the decrease in overall investment in the first quarter, investor confidence in the Greater Toronto commercial and development markets remain strong. Cap rates continue to compress and quality assets continue to attract the attention of well funded investors,” noted Paul Richter, Director, Data Solutions at Altus Group. “Infrastructure investment initiatives will further ensure that the market continues to thrive, allowing for intensification around future transit nodes.”

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