By Altus Group | December 17, 2019

Abundant Capital Remains, with Investors Becoming More Cautious with Certain Markets and Return Expectations

Canada’s economy slowed in the third quarter with real GDP falling to a rate of 1.3%, primarily due to falling exports as trade tensions linger. However, economic conditions in Canada remain robust. Unemployment levels hit a historic low, wages have bumped up, household consumption has increased, and the 5-year Canadian bond rate remains low. To dampen household debt levels and, in an effort to weather out a possible economic downturn, the Bank of Canada left its overnight interest rate as is at 1.75%. Investors continue to be vigilant and safeguard capital under global market uncertainties and are managing risk by repositioning lower-yielding assets and investing in assets that are stable with long-term cash flows.

Overall national investment volume year-to-date fell by 16% to $34.6 billion compared to the same period last year. The largest share of investment volume during this period was residential land at 19%, followed by an active industrial and office sector which accounted for 19% and 17%, respectively. When including share sales activity, overall investment volume year-to-date for 2019 dropped by almost 17% from the same period in the previous year with several notable transactions closing mid-year. Multi-tenant and single-tenant industrial also had the strongest momentum on the product investment barometer according to Altus Group’s Investment Trends Survey in Q3 2019. Vancouver and Toronto remained the top preferred markets this quarter on the buy/sell momentum barometer, with Ottawa and Montreal tied at third. Ottawa and Montreal were also the only two markets that showed a positive year-to-date increase in investment volume by 57% and 41%, respectively. Q3 2019 registered a total of 1,838 investment property sales transactions over $1M across Canada, representing a total value of $12.1 billion, a decrease of 9% and 7%, respectively, compared to the same quarter last year.

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

(National Property Transactions – All Sectors by Quarter)


The office sector in the first three quarters of 2019 largely remained the same with a slight decrease of 3% in total volume compared to 2018, while deal counts went up by 2%. A total of 433 office transactions were registered worth close to $5.9 billion year-to-date. The top three markets in terms of office investment volume were Toronto, Montreal and Vancouver. Investors continue to seek well-located assets with potential upside in rents. The largest office sale transacted in Q3 2019 was an improved 28-storey office building located in Ville-Marie in Montreal near Square Victoria Metro Stations, which was almost 96% occupied at the time of sale. The property sold for $322,500,000 million to Allied REIT.


Year-to-date national retail sales volume was down by nearly 27%, yet total transactions only dropped by 5% indicating that while the retail sector continues to see changes, investors remain active and seek opportunities across the country with a shift to private investors. The retail sector in the first three quarters of 2019 represented 12% of total investment worth over $4 billion, while transactions totaled 1,025 deals. Toronto was once again the most active market in the retail sector followed by Montreal in second. The largest retail transaction in Q3 2019 was the sale of a street front semi-detached retail property located at 64 Charles Street East in downtown Toronto. The property sold for $55 million to Skye Capital, the owner of 62 Charles Street East.

Pie chart showing total dollar volume of Q3 2019 property transactions by sector, nationally.

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


Investment volume for industrial product year-to-date totaled $6.5 billion which represented an increase of 8% compared to the same period last year. The industrial sector has expanded in several markets across the country, yet a shortage of product remains. Year-to-date investment activity in total transactions declined slightly by 4% as product shortages continue to remain a challenge. Toronto, Montreal, Vancouver, Ottawa and the Greater Golden Horseshoe all had positive growth in investment volume activity compared to the same period last year. Vancouver and Toronto were the only two markets with an increase in the number of year-to-date transactions at 18% and 3%, respectively. The two largest industrial transactions this quarter were the $215 million sale of a 118,135 square foot property located at 80 Via Renzo Drive in Richmond Hill purchased by AIMCo and the $156 million sale of Amazon’s new 1 million square foot fulfilment centre in Ottawa’s Cumberland region. Concert Properties purchased a 90% interest in the distribution facility for $156 million, while Broccolini will retain its 10% share. It is now the largest industrial building in Ottawa.


The multi-residential sector market fundamentals continue to align with strong demand, stable returns and low vacancy rates and was one of the top asset classes for investment in 2019. Total investment volume year-to-date for apartments approached nearly $5.6 billion which dropped slightly by 9% compared the same period last year. Montreal had the strongest investment volume activity year-to-date in this sector with total volume recorded at $1.9 billion while the Toronto and Vancouver markets declined. Ottawa continued on its positive streak with an increase of 102% in volume compared to the same period last year. Calgary also performed well in the first three quarters of 2019 with an 85% increase in total volume in the apartment sector. One of the most notable transaction this quarter was RioCan’s acquisition of 41 Roehampton Ave, a 466-unit high-rise apartment located in Toronto at Yonge and Eglinton for $114 million.

Residential Land and ICI Land

Collectively, the land sectors (residential and ICI) accounted for $11.9 billion year-to-date, a 27% decrease in activity compared to the same period last year. Toronto had the highest volume for ICI land representing $2.3 billion year-to-date, a 4% increase from last year. A notable ICI land acquisition in Q3 2019 was the 38-acre East Harbour Lands site in Toronto purchased by Cadillac Fairview for $690 million. For the residential land sector, Montreal and Ottawa were the only two markets that recorded positive increases in investment volume year-to-date, a 68% and 66% increase, respectively, from the same period last year. The largest residential land sale this quarter was a 0.57-acre site located at 33 Avenue Road & 140 Yorkville Avenue in midtown Toronto purchased by First Capital Realty and Greybrook Realty Partners for $171 million.

Investor Focus in Canadian Core Markets Remain Steadfast

Competition continues to remain healthy, particularly in Toronto and Vancouver, where an expanding tech-sector, rising rents, tight vacancy rates and strengthening demand for quality assets maintain healthy investor appetite. Meanwhile, Calgary and Edmonton continue to face troubles with vacancy rates with the impact of fluctuating energy prices and overall slower economic growth. Investors will continue to keep a cautious eye during challenging market conditions but have retained their confidence in Canadian markets or wait patiently for potentially higher-yielding and value-added opportunities in markets where fundaments remain strong.


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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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