Home News Blog: Investing in Canadian Commercial Real Estate
All News

Blog: Investing in Canadian Commercial Real Estate


Investors fuel robust pace of sales in Canada’s commercial real estate market

As investors continue to search for yield in a competitive marketplace, Canada is increasingly landing on radar for international investors.  

Globally, the sale of commercial real estate and multifamily assets reached record highs in 2021, surpassing US $1.3 trillion, according to Real Capital Analytics. The Canadian real estate market also is experiencing a robust pace of investment activity. Domestic and global investors propelled a new annual high volume of transaction activity in 2021, while cap rates also set new record lows in almost every property type. Commercial and multifamily property sales for 2021 topped $59.3 billion, exceeding the $35.2 billion in sales that occurred in all of 2020.

There are some common drivers behind that surge in investment activity, notably the abundant “dry powder” from investors globally that are searching for accretive risk-adjusted yields. Institutions are maintaining, if not increasing allocations to real estate, and they are looking for secure places to deploy that capital.

Steady growth path

Canada is attractive to investors for a number of reasons. It’s a mature market with a diverse and growing economy, not to mention possessing the stability and transparency that many global investors are seeking. Globally, Canada is the 7th largest property market in the world at an estimated value of $363.9 billion, which puts it ahead of other major countries such as Hong Kong, Australia, and Sweden, according to MSCI. Canada is also the fastest growing country in the G7 thanks in large part to strong immigration. According to Census data, Canada’s population grew by 1.8 million people during the 5-year period from 2016-2020.

In addition, the country’s economic growth has bounced back to pre-pandemic levels, with GDP growth of 4.8% in 2021 that is expected to moderate to 3.9% in 2022 and 2.8% in 2023, according to the OECD. New supply in major Canadian markets does not appear to accommodate the demand that continues to be created from e-commerce, and population growth has proven to create significant demand (23.6 million sf per year) and put upward pressure on rental rates.

One of the reasons the Canadian economy absorbs financing crises better than its U.S. neighbour is because it has less appetite for exotic structures. Occupancy levels also are more stable due to a more disciplined approach to speculative development, which helps to keep development from getting overheated.

Leader in ESG

In a marketplace where investors are increasingly focused on ESG, Canada is emerging as a leader. Since 2016, Canada’s volume of sustainable investing assets has more than doubled to an estimated total of US $2.4 trillion as of 2020, according to the Global Sustainable Investment Alliance. According to the Canada Green Building Council, there have been more than 4,350 LEED certified buildings in Canada and more than 8,500 LEED registered buildings since 2004 – giving Canada the second highest number of LEED projects anywhere in the world. The Canadian government also is committed to achieving net-zero emissions by 2050 and is working towards a target to reduce greenhouse gas emissions by 40-45% from 2005 levels by 2030.

Investors pursue industrial assets

Consistent with global trends, the favoured property types in Canada are industrial and multifamily. Strong fundamentals and a positive outlook for growth are fueling investment activity in both sectors. E-commerce demand has pushed industrial vacancies to less than 1%, which in turn is driving strong rent growth. Compared to the U.S., Canada’s supply chain is not as developed, meaning that demand from e-commerce has not been as explosive as it has been in the U.S. However, investors see an opportunity to get into a market where there is significant potential for more expansion ahead. One of the factors driving demand is population growth. According to an analysis by CBRE, population that is expected to grow by 2 million people by 2026 will generate demand for an additional 81.2 million sf, based on the assumption that consumption of goods by the average person translates to 40 sf of space.

The strong fundamentals in the industrial market have resulted in exceptional rental rate growth and cap rate compression, both of which are expected to continue, which has resulted in very strong total returns. Investor demand being focused on core and build to core results in less competition for strong value-add and core-plus investments, which has also been experiencing extremely strong market fundamentals, resulting in strong relative risk adjusted returns. Despite Canada’s large land mass, growth remains focused on major metropolitan areas, such as Montreal, Toronto, Vancouver, Calgary, Quebec, Edmonton, and Ottawa. In particular, companies that are looking for a highly educated talent pool and access to transit and amenities are targeting the top three gateway markets – Montreal, Toronto, and Vancouver.

Investors leverage local expertise

For many investors, the risk-adjusted returns and growth outlook present a strong business case for “why” to invest in Canada. A second important question for investors is “how” to successfully deploy capital, while also getting the best risk-adjusted returns. Like any country, Canada has its nuances where you need that insider’s perspective and boots on the ground local knowledge to find good investment opportunities. Mistakes can be costly. As an example, the U.S. retailer Target made an aggressive move into Canada several years ago that turned into a failure. The company ended up closing all 133 of its stores and exiting the market. As a counterpoint, Walmart has a thriving business in Canada with more than 400 stores. Target failed because they didn’t understand the market.

For commercial real estate investors, the Canadian market is very concentrated from an ownership perspective, which makes it difficult to access properties. Another unique nuance of the Canadian market is that transactions are more than just business, deal-making is very relationship and trust based. That is why it is important for investors to work with local partners that understand those dynamics and have relationships to identify opportunities and execute on investment strategies.

Triovest Investor Relations | Luigi Luppi | lluppi@triovest.com


Other News

Triovest Wins 2022 National Pinnacle Award

Blog: Canada’s demographic trends fuel stability for CRE investors

Blog: Making ESG goals a reality

9925 Building Team Wins Operations Team of the Year Award

Lululemon to Open Flagship Store at 2 Bloor W

Triovest Acquires Warehouse Facility in Mississauga

Blog: Investing in Canadian Commercial Real Estate

Triovest Joins FSB Task Force

4455 Rue Cousens Acquisition

Harwood Business Park Development

Acquisition of 22-Acres in Pickering, Ontario

Cathedraltown Acquisition

1-8 Prologis Wins International TOBY Award

Triovest Adds VTS Lease Technology to its Operating Platform

Triovest Recognized with Multiple Honourable Mentions at BOMA Toronto’s 2021 CREST Awards

Triovest Acquires 525,000 SF of Logistics Space in Etobicoke

Triovest Achieves 4 Stars in 2020 GRESB Assessment

New 55+ Residential Development for Taunton Gardens

Coril Welcomes Mark Renzoni and David Gerofsky to the Board of Directors

Triovest Appoints a New President and CEO

Triovest Supports Fitwel Viral Response Module

Leading Sustainability Performance at the 2020 HOOPP LEAP Awards

ATB Operations Team Wins Building Operations Team of the Year Award

Triovest Joins Fitwel Champions Program

Triovest Receives 2020 Employee Recommended Workplace Award

1 Prologis Boulevard at Mississauga Gateway Centre Receives BOMA BEST Gold Certification

2-8 Prologis Boulevard at Mississauga Gateway Centre Receives BOMA BEST Gold Certification

Atrium Receives LEED Gold and Energy Star Certifications

Three Wins for Triovest at the 2019 BOMEX Awards

Triovest Presents its 2018 Sustainability Report

Jean-Marie Saint-Georges Inducted to the HOOPP LEAP Hall of Fame

Trio of Wins at the 2019 HOOPP LEAP Awards

Triovest Receives Management of Atrium on Bay

Triovest Recognized as a 2019 Employee Recommended Workplace

2 Bloor Street West Achieves Platinum Wired Certification for Best-in-Class Internet Connectivity

Triovest Recognized as a Green Lease Leader

Triovest Presents its 2017 Sustainability Report

6880 Financial Drive Reaches for the Star!

Triovest Recognized Globally for Sustainability Achievements

Triovest Celebrates Final Phase of Construction at River Landing

6880 Financial Drive Achieves Rick Hansen Certification

Happy Holidays from Triovest

Keynote Tower First in Calgary to Achieve Gold Wired Certification for Best-in-Class Internet Connectivity

Triovest Wins 2019 BOMA Pinnacle Innovation Award

Triovest Joins ‘Disclosure Challenge’ to Champion Building Data Transparency

Triovest Receives Canada’s Greenest Employer Recognition

Triovest’s 2019 GRESB Score Among Best in Canada

Triovest Recognized by Edmonton Building Energy Benchmarking Program

Alan MacKenzie Appointed to President of Triovest Realty Advisors

Triovest Applies its New Mission at Centre on Barton

1 Prologis Blvd, Mississauga, Earns LEED® CS Gold

Centrium Place, Calgary, Earns LEED® EB:O&M Gold

Triovest Shows Sustainability Leadership at HOOPP LEAP Awards with Five Wins

High Energy Star Scores for two Triovest Properties

Triovest Presents its 2016 Sustainability Report

Triovest receives BOMA Certificate of Excellence for 11 King Street West

The HUB at King George Station and Marine Gateway Achieve LEED® CS Gold

Triovest Awarded Management of Spectrum Square in Mississauga

Triovest Achieves Five Green Stars in 2017 GRESB Assessment

Triovest Awarded with Best Peer-Reviewed Sustainability Report

Triovest Launches Spectrum Square Phase Two

Triovest Wins the Industrial Lease of the Year at REX Awards

Official Ground Breaking Kicks Off Development of Sugar Wharf

Triovest Recognized as an Employee Recommended Workplace

Triovest Receives Green Lease Leader Recognition

Triovest Achieves its Strongest Performance at the HOOPP LEAP Awards

Triovest Receives Kingsett Innovation Award

ATB Place Wins TOBY Award


Yves-André Godon Moderates Panel at MREF

Skyview Power Centre Offers Support for Fort McMurray Residents

Triovest Represents Greystone Managed Investments Inc. in the Acquisition of a $260 Million Development on Toronto’s Waterfront Anchored by the LCBO

Seven Wins for Triovest at Recent BOMA Awards

John Crombie to Receive a 2016 Researcher Award

Marine Gateway Wins Mixed Use Development Award

Triovest Shows Sustainability Leadership at HOOPP LEAP Awards with Seven Wins

Saks Fifth Avenue OFF 5TH to Open at Skyview Power Centre

Triovest Realty Advisors and Balboa Investments Announce Unification

Triovest Breaks Ground at River Landing

Triovest Awarded Four Green Stars in the 2016 GRESB Real Estate Assessment

Triovest’s “TESA” Wins the 2016 BOMA Canada Pinnacle Award for Innovation

Triovest Presents its 2015 Sustainability Report

ATB Place Achieves LEED® EB:O&M Gold Certification

Three Wins at UDI Awards for Triovest Managed Properties

Triovest Supports Anti-Bullying Across Canada

ATCO Centre Receives BOMA Edmonton Earth Award

Triovest Nominated as Global Finalist for Best First-Time Sustainability Report

Certificate of Excellence for ATB Place in Edmonton

Triovest to Take Part in Canstruction Vancouver

Triovest Creates UnCANny Art for Canstruction Vancouver

Triovest Receives a BOMA Certificate of Excellence for Foresters Centre

Triovest’s Property Management Team in Calgary Receives President’s Award for Sustainability

Great Plains I Awarded with Service Excellence

Triovest Awarded with a TOBY® and Certificate of Excellence Award for Centrium Place in Calgary

Triovest Demonstrates Sustainability Thought Leadership by Solidifying Its Priorities

Triovest Receives Seven Awards at BOMA Gala

Triovest Implements an Innovative Sustainability Management System

Triovest Featured in 2015 BOMA BESt National Green Building Report

Triovest Acquires RBC Meadowvale Campus

Triovest Takes Over Management of 5150 Spectrum Way

Triovest Appointed Manager of 2 Bloor Street West

2014 Sustainability Report

Triovest Acquires Staff from Mackenzie Goulais Inc.

River Landing Acquisition

National Retail Portfolio Achieves BOMA BEST Certification

Triovest Presents Inaugural 2014 Sustainability Report

Three BOMA BEST Gold Certifications for Triovest

Triovest Announces Two Executive Appointments: New President and Chief Operating Officer

HOOPP Honours Triovest with Two LEAP Awards

Cross Roads Achieves BOMA BESt Level 3 Certification

Exciting New Mixed-Use Development Begins in Waterloo

South Fraser Industrial Centre Acquisition, Delta, British Columbia

BOMA BESt Certificate of Achievement for Keynote Office Tower in Calgary

Triovest Receives Three BOMA BESt Certificates of Achievement in Montreal

Skyview Power Centre in Edmonton Achieves BOMA BESt Level 2

Triovest Opens a New Office in Saskatoon

Gold and Platinum Marcom Awards for Two Triovest Earth Initiative Marketing Campaigns

Triovest Acquires a Large Industrial Development Site in Halton Hills

Triovest Acquires 8530 Cambie Street in Vancouver, BC

Property Management Team of the Year Award for Edmonton

Construction to Begin on Industrial Development in Halton Hills

Triovest Acquires Asset Management Responsibilities for a Portfolio of Properties in Quebec

WestHills Towne Centre Receives BOMA BESt Level 3 Certificate of Achievement

Scottsdale Centre Achieves BOMA BESt Certification

Triovest Acquires One of the Largest Fully Serviced Industrial Development Sites in Greater Montreal

Triovest Acquires a 240 Acre Development Site in Calgary

Eastgate Square Wins Marketing Award at ICSC

4321 Still Creek Drive Wins EARTH Award

400 St. Mary Avenue Wins HOOPP 2014 LEAP – Energy Saver Award

5799 Route de L’Aèroport Wins the HOOPP 2014 LEAP – Industrial Engagement Leader Award

18,103 Trans-Canada Wins the HOOPP 2014 LEAP – Industrial Tenant Leader Award

4321 Still Creek Drive Earns Silver LEED EB:OM Certification

Sunnyside Mall Supports Local Talent with a Design & Artistry Showcase

Triovest Announces Two Senior Appointments

720 King Street West Achieves LEED EB:OM Gold

320 Bay Street Achieves BOMA BESt Certification

Vince Brown Appointed President & CEO of Triovest

Triovest Receives Three BOMA BESt Certificates of Excellence

Four LEAP Awards for Triovest

Yves-André Godon Appointed COO of Triovest

Triovest Awarded Green Star in the 2015 Global Real Estate Sustainability Benchmark

Triovest Awarded Management of Wellington Commons

Keynote Office Tower 1 Receives LEED EB Gold

Yves-André Godon on Panel for GRESB Results

Philippe Bernier Honoured with Canada’s 2016 Clean50 Emerging Leader Award

Triovest Wins Canada’s 2016 Clean50 Project Award

ATB Place Honoured with BOMA Canada’s National Earth Award