Private investors in the Canadian commercial property market outstripped the country’s big pension funds in the last quarter, overturning the prevailing trend of the previous quarter.
In the first quarter of 2014, pension funds dominated the market, accounting for 31.6 per cent of all investment, but their activity fell in Q2, decreasing to 11.4 per cent according to CBRE.
Private buyers increased their activity to 61.6 per cent compared with 39.6 per cent in the first three months of the year. The number of transactions increased by 9.7 but the dollar value fell from $6.7 billion in Q1 to $5.1 billion in Q2.
CBRE’s director of research in Canada, Ross Moore, explains that pension funds have not lost their interest in real estate but are particularly interested in developing property rather than acquiring it at present.
Right now, a lot of the buying is being done by smaller Canadian pension funds, as opposed to the major players.
A lot of the activity in the second quarter was focused in Western Canada. Commercial real estate jumped by 43 per cent to $772.3 million in Calgary (pictured) over the first quarter figures.
Edmonton increased by 18.6 per cent to $345.5 million in the same period. Vancouver gained a solid 10 per cent to $766.7 million.
Toronto was down in the second quarter, dropping from $3.6 billion to $1.9 billion. The number of commercial real estate transactions increased from 397 to 408 quarter to quarter.
