21 August 2018

Mixed results for Canadian RE in 2017

01 March 18 - Irene Theofanidou
Mixed results for Canadian RE in 2017



Investment - GREECE


Consultant - GREECE

Solum Property Solutions

Consultant - GREECE


Canadian retail real estate had mixed results in 2017 due to changing consumer demands, increased competition from e-commerce sales channels and a move away from big-box and department store formats.


While  the  national  average  yields  for  the neighborhood/community  and  power  categories  both  rose  slightly  in  H2  2017,  the  sector was flat overall, and shifts in yield were confined to a select few markets.

Despite a slight uptick in average cap rates in H2 2017, investors remain confident in the sector for high-quality urban assets or those with an opportunity for future development.

Vancouver  continues  to  see  the  strongest  demand  for  retail  assets,  where  the  average  cap  rate  for  neighborhood/community  centers  was  the  lowest  in  the  country  at  5.25%  and  for  power  centers  was  5.0%. 

Neighborhood/community  center  cap  rates  rose  by  25  bps  in  Calgary;  power  center  cap  rates  rose  by  13  bps  in  Montreal,  and  neighborhood/community center cap rates fell by 13 bps in Kitchener-Waterloo.



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