The Canadian real estate industry has been going through a sharp growth over the past few years. Despite a number of challenges, investors are very much keen on investing their dollars in the real estate market in Canada. According to the sources, the stable condition of the increasing demand of property in Canada is the reason behind such interest among the investors.
However, considering the increasing competitiveness in the residential real estate in this country, a number of experienced investors are shifting their focus to commercial real estate. So, if you too are planning to shift your focus on commercial real estate, let’s have a look at the top 5 commercial real estate trends for 2016.
1. Senior residences and student housing
If the demographics of Canada are to be believed, millennials and Baby Boomers will drive the demand in the commercial real estate market in the coming years. Very much like the residential market, the commercial real estate market too is going to be benefited by these two generations according to the investors.
Opportunities are scattered in the commercial market such as student housing, self-storage, senior housing – all of these opportunities are driven by the above mentioned two generations. “Some more niche types of commercial investment are becoming more popular” says a renowned broker, author and speaker, Claude Boiron. According to the reports of Emerging Trends in Real Estate, the Baby Boomers are also creating investment opportunities in sectors like healthcare.
2. Growth in Suburbia
Despite the strong urbanization trend in urban areas, suburbs around the Greater Toronto Area are still considered as a very good opportunity for commercial real estate growth. According to the reports of The Emerging Trends in Real Estate, investment in the transit infrastructure will attract more investors and tenants in suburbs in the coming days. However, the tax incentives, services, operating costs need to competitive. The report says, “Even in the big metro areas, suburbs represent a major share of the existing job base. In the top 40 metro areas, 84% of all jobs are outside the core. That is the basis for optimism for the suburban future.”
3. Mixed use properties
A change has occurred in the office real estate industry as well. A new category has been introduced and that is becoming popular as condominiumized office units. If we take the example of Finch and Keele in Toronto for instance, every unit in this office building is condominiumized. The demand of these units among the doctors, lawyers, accountants is massive. They are ready to pay $300,000 to $500,000 for such units. You too can buy such a unit and can have a doctor or lawyer as your tenant without worrying about the Residential Tenancy Act. After the completion of the 5 or 10 year lease you can increase the rent accordingly.
4. Use of technology and social media
The extensive use of smartphones, cloud-computing, internet, e-commerce is continuously shaping up the way business is done. And this has certainly a strong effect on the commercial real estate as well. Frank Magliocco, national real estate practice leader at PwC Canada says, “We hear a lot about technology and how it is a disruptor in the economy, but it’s also a disruptor in the real estate market, and no more so than in the office and retail sectors.”
This is an era of promotion and when it comes to the promotion of commercial real estate, the role of internet and social media is massive. Investors can get all the information and solve their queries from there which eventually enhance the popularity of the commercial real estate.
5. New Industrial opportunities
The growth of opportunities in the industrial sector is another consequence of the extensive use of technology. New opportunities are being created in different sectors. Renowned broker Claude Boiron says, “We are starting to see that in our consumer-driven society, transportation, distribution is very necessary- people want same-day shipping, and not many things are coming out of store; they are coming out of industrial properties.”
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