This year could see the third most active year for commercial real estate as foreign investment drives $31.9 billion of transactions.
Toronto is forecast to see the lion’s share of new developments in the commercial sector according to a new report from CBRE as global investors are attracted by the strong market.
“Toronto starts 2017 on the A-list of commercial real estate markets. Real estate players from cities across the globe are casting envious glances at its performance. The numbers are truly compelling,” commented Paul Morassutti, Executive Managing Director for CBRE Limited.
He highlighted several key elements which make Toronto’s commercial real estate sector so attractive to investors: “the lowest downtown office vacancy rate of any major North American city with good rental growth projected for 2017, the second lowest industrial availability rate, the second lowest multifamily vacancy rate and its hotels recorded record occupancy levels in 2016.”
The city is expected to far exceed the pace of activity in other Canadian cities this year.
The other major forecast from the CBRE report is a continued rise in development land costs. Commercial land transactions are set to hit a new record in 2017 at $5.2 billion with a lack of development land especially in urban centres and near transit links.