Lots of investment activity in local commercial real estate

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METRO VANCOUVER (NEWS1130) – Metro Vancouver’s commercial real estate is on a roll, with investment activity at a record high according to RealNet Canada.

The national data firm is based in Vancouver and its president, George Carras, says local sales of more than a quarter-million dollars hit $5.7 billion in the 12 months to the end of June. He notes 55 per cent of that is land, most of which is headed for housing but is deemed commercial until homes are built.

Carras explains the sectors of office, retail, industrial, and apartments combined are showing a 9.4 per cent annual growth rate. But he says mid-priced retail is the “sweet spot.”

“And that’s the $3 million-to-$10 million spot. They seem to be the ones that have been outperforming. In general, retail has generated about 10.5 per cent compound annual growth rates,” says Carras.

But as with residential property, Vancouver’s commercial real estate is the most expensive in Canada. It means a lower yield, the amount a buyer can expect to make in revenue compared to the purchase price. Carras says that’s mostly because of “the unique situation that Vancouver represents as an investment, when you’ve got a good economy, tight supply and high demand.”

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