Sales jumped 38 percent to $18.7 billion on rising land deals
‘One of the best near-shore markets in the world,’ CEO says
The Toronto region posted its seventh year of record commercial-property sales and there’s room to rally as a buoyant economy leads to surging demand for everything from hotels to offices, according to Altus Group Ltd.
Among high-profile transactions was Alberta Investment Management Corp.’s purchase along with KingSett Capital Inc. of the remaining 50 percent stake in Scotia Plaza for C$682 million. Also Leadon Investment Inc. bought the 567-room Delta Hotels by Marriott Toronto for C$216 million as part of their larger C$1.1 billion portfolio acquisition of properties across Canada from British Columbia Investment Management Corp.
Land sales took up the bulk of the annual increase in investment volumes rising 49 percent to C$8.5 billion, Altus said. Residential-land sales should remain strong this year, although high prices and policy changes have introduced more uncertainty to the market, Altus said. Vacancy rates in office and industrial markets should remain low due to tight supply, the group said.
Organizations like WeWork Cos., the co-working giant which opened a 35,000-square-foot office with 700 members in Toronto this week, have completely changed the way that space gets contracted, Courteau said. Companies that may have specialized in shopping-mall development are now considering multi-use space that includes apartments, offices and rentals, he said.
“The real estate landscape has changed to one where inventory management, understanding demographics, thinking about the use of property and about different rental scenarios is now a much more sophisticated game,” he said.
That’s a bonus for Altus, which provides global data on commercial real estate and consulting options for everything from property tax to investment feasibility. “We bring a lot of expertise to those large complex type of opportunities. Every time someone wants to look at a major opportunity, we’re there first,” Courteau said.
The company’s shares have jumped 70 percent over the past three years for a market value of C$1.3 billion, compared with about a 1 percent gain for Canada’s benchmark S&P/TSX Composite index.