TORONTO — Canadian commercial real estate took a nosedive in Q2 but is climbing out from the wreckage of the COVID-19 shutdown to a possible Q3 rebound.
Altus Group has released Q2 2020 results for commercial real estate investment in Montreal, Vancouver, Calgary and Edmonton and found the impact of the COVID-19 shutdown at the beginning of the pandemic was seen across Canada.
The group’s National State of the Market 2020 report found there is “resiliency in the level of demand for single-family and townhouses across the country,” an Altus release stated.
The report found the bulk of Q2 2020 activity in Edmonton centred around industrial and ICI land asset classes with a respective five per cent and 33 per cent share. The apartment sector has its lowest quarter on record since Altus Group started tracking the market, the report stated, with only six transactions worth $14 million in value.
In Calgary, residential land was the most active sector in the second quarter with a 35 per cent share of activity due mostly to one large transaction involving development land in the city’s northern suburbs. The industrial sector was 29 per cent of total Q2 activity with 24 industrial transactions totalling $112 million in value.
Vancouver’s condominium sector took a 30 per cent dip in Q2 compared to the previous year making it the lowest Q2 since 2009, but the single-family asset class posted a year-over-year increase of 59 per cent outperforming Q2 2020 apartment sales.
“This is a trend that was seen not just in the Vancouver market, but in markets across the country,” the release stated.
Montreal’s investment momentum was positive but declining as rising cap rates across all asset classes occurred as the pandemic took a toll on investment activity. The multi-residential sector was the most active with $1 billion in investments and was the lone sector to reach the billion-dollar mark in the first half of 2020, a 29 per cent decline compared to the same period last year.