Robust Demand Has Canadian Commercial Property Investment Off to a Strong Start in 2018

Demand for commercial real estate remains at peak highs as investors search for yield

Canadian Economic Outlook & Market Fundamentals
First Quarter Update 2018

MISSISSAUGA, ON, April 30, 2018 /CNW/ - Canadian commercial real estate activity was off to a strong start in 2018 as demand continues to outstrip supply, according to a new report issued by Morguard Corporation ("Morguard") (TSX: MRC).

"The appetite for commercial real estate investment remains at peak highs, with the flow of capital only being limited by the supply of assets available," said Keith Reading, Director of Research at Morguard. "Investors are seeing commercial real estate in Canada, with its strong track record of performance, as a safe bet for investment."

Unbalanced demand was noted across all asset classes in the first quarter, with the office sector again leading the way. Multi-suite residential and industrial sales also remained brisk, with the shortfall in supply forcing investors to look to smaller markets and second-tier assets. Despite heightened risk due to increased vacancies, retail property values also remained fairly stable.

"Demand is really remarkable across all the asset classes, even those with increasing headwinds," said Reading. "The number of notables sales already closed and in the pipeline is signifying another record year for investment, provided the supply of assets for sale remains available."

Lingering uncertainty over North American Free Trade Agreement negotiations contributed to a slowdown in economic activity, with most global equity markets down to start the year. This uncertainty, paired with rising consumer debt, has the Bank of Canada expected to exercise caution on future interest rate hikes.

"With global volatility in the equity markets, investors are searching for consistent yields," said Reading. "When combined with the Bank of Canada's prudent approach to interest rates, this creates favourable conditions for real estate investment in Canada."

The First Quarter Update of the 2018 Economic Outlook and Market Fundamentals Research Report, released today by Morguard, provides a detailed analysis of the 2018 real estate investment trends to watch in Canada. The full report is available at www.morguard.com.

About Morguard Corporation

Morguard Corporation is a major North American real estate company.  It has extensive retail, office, industrial, multi–suite residential, and hotel holdings owned directly, or through its investment in Morguard REIT (TSX: MRT.UN), Morguard North American Residential REIT (TSX: MRG.UN) and Temple Hotels Inc. (TSX:TPH). Morguard also provides real estate management services to institutional and other investors. Morguard's owned and managed portfolio of assets is valued at $21.2 billion.

For more information, please visit www.morguard.com or follow us on LinkedIn.

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SOURCE Morguard Corporation