2013 saw a distinct trend in commercial real estate in the city of Vancouver. As reported by the Vancouver Sun, investors have been slowly moving away from office space to more retail based real estate, in deals of $10 million and more. Offices, in fact, lost 48% investment, while retail gained an impressive 95%. Colliers Canada, which performed the analysis, mentioned that this is a little out of the ordinary; the growth of retail was attributed to a significant merger the likes of which don’t always occur. This merger was H&R REIT’s acquisition of Primaris REIT, and was valued at $3.1 billion, and KingSett Capital buying a portfolio from the latter company valued at $1.9 billion.
Despite this anomaly, retail is still ahead of office real estate in the commercial space. Spurred on by Target, more and more American operators are moving in. Canada has typically been described as being under-retailed, which means that there is plenty of retail space for new vendors. This is, however, leading to a dramatic shift in the retail landscape, with national corporations and franchises taking over local, “mom-and-pop” type stores.
Moving forward into 2014, Colliers predicts the industrial and warehouse commercial space to be in demand alongside retail. The boom in acquiring office space has slowed down a bit, but demand in downtown areas remains as high as ever. This is due to the fact that the demand in office space has always been closely tied to the availability of public transit, something downtown areas provide readily in major cities.
Vancouver, and British Columbia in general, is still lagging behind Alberta and Saskatchewan in terms of overall retail investment, but as the report by Colliers suggests, the market is slowly improving. 2014 and beyond could very likely prove to be boom years for the province and its cities. For now, we will have to wait and see.
Source: Vancouver Sun
