An analysis of 12 of the largest commercial real estate markets in Canada shows developers have shifted their focus towards purpose-built rental construction, some at the expense of new residential condominiums and commercial builds. A commercial retail space is advertised for lease along King Street West in Toronto on March 9, 2021. THE CANADIAN PRESS/Tijana Martin
TORONTO – An analysis of 12 of the largest Canadian commercial real estate markets shows developers have shifted their focus toward purpose-built rental construction, some at the expense of new residential condominiums and commercial buildings.
Re/Max Canada’s 2024 Commercial Real Estate Report, which examined the dozen markets during the first quarter of this year, says multi-family and industrial real estate were the top-performing asset classes in all cities.
It says the federal government’s decision to cancel the GST on new residential builds has spurred the construction of purpose-built rentals, which were the primary focus in every major urban centre analyzed, followed by student housing and seniors’ residences.
Landlords of malls and strip plazas have also been increasingly exploring a residential component amid a push for more density, signalling a “clear trend toward future mixed-use developments.”
But Re/Max Canada president Christopher Alexander says due to Canada’s growing population, which now tops 40 million people, the efforts to boost residential construction will still fall short of what is needed.
The report also says despite the popularity of e-commerce, neighbourhood retail is performing well thanks to a shift toward service-focused stores from those selling goods such as clothing.
This report by The Canadian Press was first published June 6, 2024.
