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Commercial real estate figures for 2017, collected by Altus Group, convey a familiar narrative for the Vancouver market area, which continues to be buoyed by strong performance in the residential land sector. The 2017 calendar year saw 2,274 transactions over $1 million, totalling $14.2 billion and representing a 16 percent increase from the previous year. That puts Vancouver only behind the Greater Toronto Area, which registered $23.5 billion.
Activity in the residential land market pushed the sector near 50 percent of the total investment contribution to the entire market for the second time. The $6.56 billion recorded signified a jump of 13 percent from 2016. The top five transactions combined for a total of $992 million and included the sale of the White Spot site on West Georgia Street, two 'Jericho Lands' properties acquired by MST Development, and an industrial site — to be converted into residential — purchased at Willingdon Avenue and Dawson Street in Brentwood.
The second largest contributor to investment, the ICI land sector, totalled $2.37 billion and 17 percent of the market. Industrial land transactions had a record year, with $681 million driving a 102 percent rise over 2016. The $115 million acquisition by Wesbild of a 275-acre waterfront site in North Vancouver led the category. While agricultural land transactions fell 18 percent from 2016 levels, the $1.07 billion recorded was only the second instance of the sector surpassing the $1 billion threshold.
The office market was bolstered by Cadillac Fairview's 50 percent unloading of their downtown Vancouver portfolio to Ontario Pension Board and Workplace Safety and Insurance Board. The acquisition of Oakridge Centre for $480.7 million by bcIMC and Kunyuan International's $97 million deal for New Westminster's Columbia Square Plaza underpinned a strong retail sector that outperformed 2016 by 53 percent.
"Already at peak levels at the end of 2016, investment activity tailed off but remained strong, making 2017 the eighth consecutive year of investment growth," said Paul Richter, Director, Data Solutions at Altus Group. "While cap rates continued to compress, they did so at a much slower rate in 2017. Quality assets remain in high demand, across all asset classes. Investor confidence remains strong especially for assets that allow for intensification and the inclusion of a growing number of uses as the region continues to accommodate additional 'city centres' clustered near transit nodes."
