Foreign investment in Canada’s commercial real estate market is increasing as it provides safe, liquid investments in almost all sectors and asset classes across the country. Investors have demonstrated a willingness to pay a premium for safe and stable commercial real estate investments in a time of global economic uncertainty.
Here is a snapshot of some Canadian real estate indicators as provided by CBRE Global Research and Consulting in its Q2 2013 MarketView: 2012 was a near record year in Canadian real estate with 2013 maintaining healthy activity; as at the end of 2012, Canadian pension funds had increased their real estate allocations to the highest levels on record, through both development and investment; real estate transaction volume for the first two quarters of 2013 was C$14.7 billion (US$14.3 billion) and forecasted 2013 investment volume is C$26-27 billion; capitalization rates have begun to stabilize at historic lows and financing rates continue to be competitive.
Given these dynamic indicators, Canada has a robust domestic real estate investor community, with strong and proven public market investment trusts, pension funds and private equity investors leading the charge. That said, we are beginning to see a slow and steady increase in the number of global investors who are forming strategic ventures with Canadian real estate entities with a view to tapping into the Canadian commercial real estate market.
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Simon Crawford is a partner at Bennett Jones LLP, a law firm with offices in Calgary, Toronto, Edmonton, Ottawa, Dubai and Doha, and representative offices in Washington DC and Beijing.
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