By Altus Group | September 5, 2019

Canadian Investors Still Showing Signs of Confidence in Commercial Real Estate Led by a Healthy Labour Market and Economic Growth

TORONTO – Altus Group, a leading provider of software, data solutions and independent advisory services to the commercial real estate industry, today announced the second quarter of 2019 results for commercial real estate investment across Canada.

Across Canada, the first half of 2019 was down slightly in transaction activity compared to the first half of 2018 as economic conditions began to change with slowing global economic outlooks and repatriation of foreign capital. Amid mounting global trade tensions, Canada has shown signs of resilience. With inflation holding steady, a lower Canadian dollar, and stalled interest rate hikes, the Canadian economy is in a robust and competitive state. Meanwhile, according to Statistics Canada, Canadian real estate is contributing to the momentum adding over 57,000 workers within the Construction and FIRE sectors compared to the same month last year, representing about 14% of total employment in July.

When comparing the first half of 2019 to the same period last year, investment volume in Ottawa and Montreal picked up the pace by 52% and 20%, respectively, while all other major Canadian markets showed signs of a decrease. According to Altus Group’s Investment Trends Survey, the buy/sell momentum barometer leaned more positively towards the three major urban markets: Vancouver, the Greater Toronto Area (GTA), and Montreal. Ottawa also saw positive momentum along with improvements in the Calgary and Edmonton markets as buyer-seller expectations begin to align for certain asset classes, an indication of more buyers than sellers this quarter. Despite the overall decrease in investment activity, the top product type according to Altus Group’s Investment Trends Survey this quarter was Purpose-Built Multi-Res, Multi and Single Tenant Industrial, and Industrial Land.

Q2 2019 registered a total of 1,927 investment property sales transactions over $1M across Canada, representing a total value of $12.5B, a decrease by 11.4% and 14.5%, respectively, compared to the same quarter last year

Graph showing total $ volume of national property transactions for all sectors by quarter.

(National Property Transactions – All Sectors by Quarter)



Core office product in the first half of 2019 has remained dynamic in major Canadian markets representing 17% of total investment volume. Although the sector dropped slightly by 1% compared to the first half of 2018, when comparing activity with the previous quarter, office sales volume increased by 69% and 9% in deal counts. A total of 150 office transactions worth close to $2.4 billion were registered. The top three markets in terms of office investment volume were the GTA, Montreal and Ottawa. The GTA recorded a total of $1.2 billion, Montreal reported approximately $725 million and Ottawa recorded $254 million. The largest office sale transacted this quarter was the $640 million sale of Atrium on Bay, located in downtown Toronto, acquired by KingSett Capital and TD Greystone.


Although e-commerce continues to be a looming threat to the retail sector, consumer spending on curated experiences has gone up. Investors continue to focus on transforming older retail properties into mixed-use communities, catering to changing demographics and customer demands by combining features of retail, entertainment, office and residential uses into a single location. Many of these properties are in well-located areas near major road networks and transit nodes, making them ideal properties for successful intensification. However, investors continue to remain cautious and vigilant in an ever-changing retail market. The retail sector in the first half of 2019 represented 13% of total investment volume worth close to $3 billion, while total volume and the number of deals dropped by 27% and 7%, respectively. The GTA was the most active market in the retail sector this quarter, posting 138 deals worth $665 million. The largest retail transaction was the sale of the regional shopping centre Stock Yards Village in Toronto for $88.5 million. RioCan acquired full ownership of the property through the deal. Second to the GTA, the Montreal market was also quite active, reporting 96 transactions worth about $457 million. The second-largest retail transaction this quarter was the $45 million sale of the Méga Centre Côte-Vertu (a power centre) located in the Saint-Laurent region of Montreal.


Industrial product continues to be one of the most sought after asset classes. Demand has strengthened for larger warehouses and fulfilment centres containing higher than average ceiling heights, a result of the growing pressures from e-commerce, same-day deliveries and other alternate uses for industrial space. Industrial investment volume represented 16% of total volume in the first half of the year. However, a lack of available industrial product remains a contributor to the 9% decline in transaction volume and a 3% decline in deal counts in the same period last year. The GTA and Montreal were the only two markets this quarter that saw an uptick in volume, increasing by 20% and 5%, respectively, compared to Q2 2018. Vancouver and Montreal saw favourable increases in the number of deal counts at 34% and 30%, while the GTA saw a slight uplift by 1% from the same quarter last year. The two largest industrial transactions this quarter were in the GTA: a $45 million sale of the 51,200 square foot property located at 11339 Albion Vaughan Rd located in Vaughan and a $38 million sale of the 361,000 square foot warehouse property located in Mississauga.


The demand for rental housing has accelerated in the last few years amid the increasing costs of homeownership and rising land prices, leaving the apartment sector as the top asset class for investment in Q2 2019. The sector represented approximately 18% of total volume and 15% of total transactions among all asset classes in the first half of 2019. Investors continue to focus on upgrades to older multi-family properties and well-priced multi-family product. Ottawa was the fastest-growing market this quarter with an 1136% increase in total volume over the same quarter last year and has climbed in each of those quarters. Markets in the Greater Golden Horseshoe outside of the GTA saw the second-largest volume increase at 126%. Calgary, the GTA, and Montreal were also active in the apartment sector, increasing by 54%, 52%, and 48%, respectively. The largest apartment transaction was the sale of Le Rockhill in Montreal for $268 million, purchased by Investors Group and Minto Apartment REIT. The second-largest apartment sale was Rossland Park in Oshawa for $220 million, acquired by Q Residential.

Residential Land and ICI Land

The two land sectors combined showed a decrease in activity in the first half of 2019, representing close to $7.7 billion, a 36% decline compared to last year. Moreover, total volume this quarter was just under $4 billion this quarter, a 40% decline compared to Q2 of last year.

The ICI land sector registered 427 transactions worth almost $1.8 billion. A notable ICI land acquisition was by Crestpoint Real Estate Investments Ltd. for a 129-acre site in Ajax for about $73 million. As reported by Altus Group’s Investment Trends Survey, respondents had a positive outlook with regards to industrial land.

The residential land sector registered 288 transactions worth close to $2.2 billion. High-density land accounted for almost half the share of the sector, with the largest sale being Molson District, an approximately 27-acre high-density parcel located near the waterfront in Montreal. The deal was a joint venture purchase among developers Group Montoni, Groupe Sélection and Fonds immobilier FTQ for $126 million who intend on developing the site into a mixed-use community.

Pie chart showing total dollar volume of Q2 2019 national property transactions by sector

(Q2 2019 National Property Transactions – Total Dollar Volume by Sector)

Canadian Economy Remains Resilient

Investment in commercial real estate has remained robust and Canadian investor sentiment has remained relatively steady, yet cautious, across all sectors. Investors continue to focus their efforts on diversification, seeking well-priced product and strategically obtaining significant trophy assets this quarter. Domestically, the Canadian economy has so far fared well and is poised for growth in the face of political uncertainty and brewing global economic slowdown. An improvement in global investor sentiment, strong employment growth, steady movements in oil and gas, and manageable inflation can further contribute to positive Canadian growth performance indicators keeping investor fears at bay.


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Data Solutions connects the Canadian real estate industry through the delivery of data with unparalleled breadth, integrity and relevance.  We cover new homes, investment transactions and commercial market inventory in key markets, and also provide intelligence on the national housing market and consumer home buying and borrowing patterns.

Our solutions are used by real estate industry stakeholders to gain market intelligence, identify and validate opportunities, benchmark, strategically plan, manage risk and more.

Data Solutions is part of Altus Analytics, the software and data solutions business of Altus Group, where our focus is to empower real estate clients and partners to work collaboratively to enhance decision making, drive performance and optimize transactional efficiency. Our solutions enable firms to better organize and manage data and connect with the right information and analytics to help them gain a complete picture of real estate assets, portfolios and transactions.

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Altus Group Limited is a leading provider of independent advisory services, software and data solutions to the global commercial real estate industry. Our businesses, Altus Analytics and Altus Expert Services, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,500 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest real estate industry participants across a variety of sectors.  Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the TSX under the symbol AIF.

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Elizabeth Lambe
Manager, Communications
Altus Group
(416) 641 – 9787

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