What will be key to the commercial real estate sector’s performance this year?

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Encouraging transactions over the past month for office buildings appear to have taken place at a cap rate higher than the market was anticipating, which could offer something of a benchmark for price discovery going forward.

Industrial, multi-residential and grocery-anchored retail, meanwhile, are also set to see strong demand continue, with “sustainable” markets for each of those segments at play.

“I wouldn’t say in industrial, for example, that you’re going to see the same level of rental increases,” Fieder said. “There’s a lot of space being delivered to the market across Canada and I think you’re going to see rental rates stabilize a little bit as we work through the new supply.

“But there’s going to continue to be a strong market because what we’re building is going to get absorbed and vacancies are going to stay relatively low going forward. And I would say the same for multi-res.”

Where multi-res is concerned, the “elephant in the room”, according to Fielder, is the cost of building and delivering to market – no surprise, given recent high-profile issues with construction costs and supply challenges.

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