Industrial to remain preferred asset class in 2024: Avison Young report
February 5, 2024
47% of Q4 2023 investment sales derived from industrial properties in Canada
Toronto, ON – Global commercial real estate advisor, Avison Young, today releases its Q1 Canadian cap rate and investment trends report, revealing that although lenders will remain conservative in 2024, capital from lenders remains strong for qualified assets and strong borrowers – with industrial serving as the preferred class, representing 47% of Q4 2023 investment sales.
“The question, ‘where are cap rates trending’, echoes consistently in discussions throughout the commercial real estate industry, gaining heightened importance during periods of market uncertainty,” said Matthew McWatters, Principal, Executive Vice President and Canadian Leader, Valuation and Advisory Services, Avison Young. “It’s on everyone's mind – yet answering this question isn't always straightforward, particularly amid a scarcity of recent investment trades.”
Comprehensive market insights and key indicators are based on results from Avison Young’s proprietary cap rate market sentiment survey of experts across the firm’s Canadian markets and service lines – including multi-residential, industrial, office and retail.
“Although tightening credit conditions and CMHC financing delays were complicating factors for deals in 2023, debt is available to qualified buyers of quality assets,” said Mark Fieder, Principal and President, Avison Young Canada. “If 2024 restores interest rate stability, the outlook on deals will be more favourable for the investors waiting on the sidelines.”
Avison Young creates real economic, social and environmental value as a global real estate advisor, powered by people. As a private company, our clients collaborate with an empowered partner who is invested in their success. Our integrated talent realizes the full potential of real estate by using global intelligence platforms that provide clients with insights and advantage. Together, we can create healthy, productive workplaces for employees, cities that are centers for prosperity for their citizens, and built spaces and places that create a net benefit to the economy, the environment and the community.
Avison Young is a 2023 winner of the Canada's Best Managed Companies Platinum Club designation, having retained its Best Managed designation for 12 consecutive years.