{"id":594,"date":"2016-01-13T09:31:24","date_gmt":"2016-01-13T17:31:24","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=594"},"modified":"2016-01-13T09:31:36","modified_gmt":"2016-01-13T17:31:36","slug":"experts-forecast-strong-demand-for-vancouver-commercial-assets","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2016\/01\/experts-forecast-strong-demand-for-vancouver-commercial-assets\/","title":{"rendered":"Experts Forecast Strong Demand for Vancouver Commercial Assets"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Preliminary numbers show that 2015 was a record year for deal value<\/strong><\/p>\n<p style=\"text-align: justify;\">Commercial real estate investors will likely continue to see Vancouver as a stable market this year amid turmoil in global financial, commodity and stock markets, local experts say.<\/p>\n<p style=\"text-align: justify;\">Strong demand for investment-quality real estate assets in Canada\u2019s major centres, including Vancouver, is expected to continue despite the impact of low energy prices on Canada\u2019s economy, according to Colliers International\u2019s year-end Canada Cap Rate Report.<\/p>\n<p style=\"text-align: justify;\">Each quarter, the brokerage surveys its top investors from across Canada about current market conditions, with the capitalization rate as a main indicator of market health. The capitalization rate measures the rate of income return on any real estate investment, applied as a percentage.<\/p>\n<p style=\"text-align: justify;\">Due to Canada\u2019s current low-interest environment, uncertainty in the capital markets and the weak Canadian dollar, demand for commercial assets has stayed strong in Toronto, Montreal and Vancouver, the report said.<\/p>\n<p style=\"text-align: justify;\">\u201cIn BC, commercial real estate remains healthy overall because the West Coast has always had a certain cachet [for] pension funds, REITS (real estate investment trusts), and people that make large-scale investment decisions on property,\u201d said Chris Blanchette, Colliers\u2019 managing director, valuation and advisory services in Vancouver.<\/p>\n<p style=\"text-align: justify;\">\u201cThere are basically two kingpin markets in Canada and that\u2019s Toronto and Vancouver,\u201d he said in a recent interview. \u201cThe other markets are generally good as well, but they\u2019re smaller. And right now, Alberta is off the table.\u201d<\/p>\n<p style=\"text-align: justify;\">Blanchette said the value of land in Vancouver continues to skyrocket, pressing down cap rates across all asset classes. He said Vancouver has typically been a favourite source for real estate investment in good times and in bad. \u201cProperty values have generally stayed fairly high and stayed strong.\u201d<\/p>\n<p style=\"text-align: justify;\">The 2008 economic crash \u201cwas more or less just a little speed bump for Canada, and especially for Vancouver,\u201d he said. \u201cYou can\u2019t ignore the fact that immigration has a role to play.\u201d<\/p>\n<p style=\"text-align: justify;\">He said multi-family rental buildings should remain a hot commodity in 2016, as well as Vancouver\u2019s downtown office buildings.<\/p>\n<p style=\"text-align: justify;\">\u201cAs rental rates go up and income rises, cap rates tend to go down because of the perceived overall impact on property value is continually on the rise in the downtown core,\u201d he said.<\/p>\n<p style=\"text-align: justify;\">\u201cThe value of downtown core commercial land is nuts,\u201d he said.<\/p>\n<p style=\"text-align: justify;\">Michael Gill, a principal with Avison Young capital markets group in Vancouver, said they are also tallying the numbers for commercial deals worth more than $5 million in BC in 2015. He said the preliminary numbers show that 2015 was a record year for deal value.<\/p>\n<p style=\"text-align: justify;\">\u201cWe\u2019re going to exceed last year\u2019s numbers by approximately $700 million, and the record year that we saw in 2012, which was around $2.4 billion,\u201d he said. \u201cWe\u2019re going to come in at somewhere around $2.6 billion for 2015.\u201d<\/p>\n<p style=\"text-align: justify;\">He said deals in Metro Vancouver are primarily responsible for driving the record volume of investment in the province.<\/p>\n<p style=\"text-align: justify;\">\u201cI think 2016 is going to be pretty strong as well,\u201d he said. \u201cWe\u2019ve got assets that are on the market that are sizable in nature,\u201d he said, noting that Vancouver Bentall Centre (majority owned by Ivanhoe Cambridge) and Royal Centre (Brookfield Office Properties) could have new owners in early 2016.<\/p>\n<p style=\"text-align: justify;\">\u201cSo, when these assets trade in likely the first quarter [or] by mid-year 2016, there\u2019s some pretty substantial numbers there,\u201d Gill said. \u201cWe could likely match what we did in 2015 \u2014 we might even exceed it.\u201d<\/p>\n<p style=\"text-align: justify;\">He said those two office towers alone would represent about 2.1 million square feet of top-end office space. \u201cThat\u2019s never been available as long as I\u2019ve been in the market.\u201d<\/p>\n<p style=\"text-align: justify;\">Those deals would send a message to other investors that the market is picking up, and would signal that international investor capital is keen to find a home in Vancouver amid global economic angst, he said<\/p>\n<p style=\"text-align: justify;\">\u201cThere is a pretty strong representation coming from offshore money, coming from China and other parts of Southeast Asia,\u201d he said. \u201cAs long as that continues, we\u2019re going to see prices under pressure to increase, and yields marginally to continue on a downward trend.\u201d<\/p>\n<p style=\"text-align: justify;\">Gill agreed that investors will feel pressure to turn away from volatile markets such as stocks and commodities.<\/p>\n<p style=\"text-align: justify;\">\u201cBig institutions and private money are looking at a safe place where they can invest and get a reasonable return in a low-yield market.\u201d<\/p>\n<p><a href=\"http:\/\/www.vancouversun.com\/business\/Experts+forecast+strong+demand+Vancouver+commercial+assets\/11646875\/story.html?__lsa=c9b5-c0b9\" target=\"_blank\">Experts Forecast Strong Demand for Vancouver Commercial Assets<\/a> by Evan Duggan | Vancouver Sun<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Preliminary numbers show that 2015 was a record year for deal value Commercial real estate investors will likely continue to see Vancouver as a stable market this year amid turmoil &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2016\/01\/experts-forecast-strong-demand-for-vancouver-commercial-assets\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-594","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Experts Forecast Strong Demand for Vancouver Commercial Assets &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2016\/01\/experts-forecast-strong-demand-for-vancouver-commercial-assets\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Experts Forecast Strong Demand for Vancouver Commercial Assets &#8226; 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