Image Source: Stephanie Keating Every year, the Real Property Association of Canada (REALpac) hosts the Canada Real Estate Investment Forum. This year, the forum highlighted the key industry markers and trends for property investors beyond the media headlines and detailed what investors should expect next. The recent REALpac forum held in Toronto confirmed many of the trends experts have been predicting, while painting a positive picture of an opportune moment for Canadian real estate investors to capitalize on emerging opportunities. Forum highlights and takeaways for Canadian real estate investors include:

  • Investment activity in Canada reportedly hit $19 billion in 2013
  • Net Operating Income (NOI) per square foot continues to rise steadily
  • Vacancy rates are continuing their downward curve
  • Retail property stands out as the clear sector leader for investment returns
  • Office came in as the weakest performing commercial real estate sector
  • Calgary and Edmonton came in virtually tied for capital growth and income returns in 2013

While Calgary will continue to act as a magnet to draw workers, capital, and head offices to Alberta, the consensus among analysts is that Edmonton is now leading in terms of investment prospects. This should increase, as Edmonton offers more room for growth, and billions of dollars in new developments are being completed. Experienced Canadian property investors will likely find that much of their best portfolio performance will come from retail, which is anchoring communities and benefiting from the recent urbanization trends. Consumer spending in Alberta is unlikely to slow down anytime soon due to the current level of economic growth. In fact, quite the opposite is expected. This pressure on retail space should benefit landlords through even lower vacancy rates, rising rental rates, and increased performance related income. Although construction is taking off in Edmonton, perhaps the one major cause for urgency among Canadian investors is the increased demand for investments by foreign investors. The increased competition amongst private equity and increased liquidity from global capital flows may quickly absorb inventory and cause prices to rise. While this is great for those commercial real estate investors that already own property in Alberta, it could mean fewer deals to choose from in the months ahead.  

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