GTA sales activity rebounds following five straight quarters of decline

TORONTO — The second quarter of 2019 results for commercial real estate investment in the Greater Toronto Area (GTA) released by Altus Group show after five straight quarterly declines, total investments were up 43 per cent compared to the first quarter, with strong momentum heading into the second half of the year.

The results from Altus Group, a leading provider of software, data solutions and independent advisory services to the commercial real estate industry, indicated investments for the first half of 2019 reached $10 billion, down 13 per cent compared to the $11.4 billion registered in the first half of 2018.

Second quarter transactions managed to record the fourth highest quarterly investment totals ever after five consecutive quarterly declines, states a release issued August 8. Confidence in the GTA market remains high as investors continue to view the GTA as a stable and attractive market, which provides a strong potential for higher returns, adds the release.

Some of the highlights from the report include:

• Re-development sites accounted for nearly 38 per cent of all investments;
• The office and residential land sector lead all asset classes this quarter, each representing about 20 per cent of the $5.8 billion total;
• The largest transaction seen this quarter was the $640 million sale of Atrium on Bay, a one million square foot office property located in downtown Toronto;
• The land sectors collectively accounted for $2.2 billion, which represents a 20 per cent increase compared to the previous quarter, but a 25 per cent decrease compared to the same period last year;
• The ICI land sector was up 69 per cent compared to the previous quarter and registering $701 million in transactions, but down 47 per cent compared to the same quarter last year;
• The apartment sector saw a 266 per cent increase from the first quarter and also a 52 per cent increase compared to the same period last year;
• The retail sector was the most traded asset this quarter and saw a 25 per cent increase in investments compared to the same quarter last year;
• Vacancy in the GTA industrial sector remains tight, with second quarter vacancies sitting at 0.8 per cent;
• The industrial sector recorded $944 million of investments this quarter, which is up 22 per cent compared to the previous quarter and up 20 per cent in comparison with the same period last year.