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The year 2020 brought a lot of uncertainty to the Canadian CRE market, especially in urban centers like Edmonton, Toronto, Victoria, and Regina. Several sectors have experienced heavy losses during the COVID-19 lockdowns, but many more have proven to be exceptionally resilient.
Industrial and multi-residential markets across Canada fared surprisingly well, while office and retail sectors are only now starting to show signs of life after a challenging year.
To gauge what is to come in Canadian CRE markets, four panellists met up to discuss current and future trends in the industrial, multifamily, office, and retail sectors. Take a look at their expert insights.
Industrial Sector the Top Performer
The pandemic has pushed businesses to embrace e-commerce and turn to online orders and deliveries to make ends meet. Unsurprisingly, this paradigm shift has resulted in a significantly increased interest in industrial solutions like warehousing.
Throughout 2020, the industrial sector has proven to be the most resilient one, making it the safest income-producing investment. The demand for industrial CRE is far outweighing the supply, forcing rents to go up for all quality solutions. The trend is expected to continue, driven in part by the rising shift to e-commerce and Amazon’s aggressive Canadian expansion plans.
Office Sector Recuperating
The office sector has fared slightly worse at the start of the pandemic, but it has quickly recuperated. Allied Properties REIT had virtually no tenant failures in 2020, performing an astonishing 258 lease transactions last year, almost half of which were with new tenants to their portfolio.
While early spring in 2020 disrupted the office sector, things started returning to normal by late fall. It is expected that 2021 will bring no new disruptions as businesses slowly return to offices, so the future is looking bright.
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