British Columbia investment review

01. High costs are reshaping development decisions

Elevated construction costs, higher Development Cost Charges (DCCs), and increased municipal fees are having a consistent, cooling effect on development activity across nearly every asset class. Projects that might have been built on speculation just five years ago are now financially unfeasible without significant pre-sales or guaranteed tenancy.

In ICI land and residential land markets, these costs are a major deterrent for developers, compounded by long timelines and rezoning challenges. This environment is fostering more cautious, highly selective development strategies, where only the best-located and highest-potential projects move forward.

02. Premium assets defy broader market softness

While market conditions have softened in several sectors, premium, well-located, or “needs-based” assets continue to outperform. Class AAA and A office buildings are outpacing older inventory, boosted by large employers’ return-to-office mandates. Retail demand is strongest for grocery-anchored centres, which are rarely offered for sale due to their irreplaceable positioning. In industrial, larger businesses are securing modern, efficient space on favourable terms, while in multi-family, well-maintained older buildings and purpose-built rentals in desirable areas remain in demand.

This “flight to quality” trend shows that, even in a slower market, investors and tenants will pay a premium for stability, efficiency, and strong fundamentals.

03. Well-capitalized buyers drive market activity

Across asset classes, most transaction activity is driven by well-capitalized players, both private investors and select institutions, able to act decisively in a high-cost, uncertain environment. Many are capitalizing on reduced competition to secure quality assets at favourable terms.

Government acquisitions and court-ordered sales make up a large share of ICI and residential land deals, while financially pressured owners facing carrying costs, financing challenges, or project delays are bringing properties to market, creating openings for opportunistic buyers. Cautious lending, pricing gaps, and economic uncertainty have sidelined many smaller participants, consolidating activity among those with the financial strength to navigate current challenges and capture long-term opportunities.

Total commercial real estate sale volume during H1 2025: $4.6B