Things are looking good for Canadian Commercial Real Estate

Oct 24, 2018 | Canada

Traditionally, the North American market has been dominated by the United States but the ongoing political and social upheaval are leading some to look to Canada as a safer option. It even earned this country the epithet: the Switzerland of North America.

Here’s why the praise is justified.

Why smart investors are looking to Canada:

1. Stable Political Climate

We’ve always had tiffs between federal and provincial politicians, but the “Canadian way” is to find a compromise and maintain stability. Investors prefer a steady and secure economic model. Canada is now emerging as a safe haven relative to the uncertainty in the United States and much of Europe.

2. Strong Economic Conditions

With a slightly undervalued dollar, foreign investors are likely to accrue an exchange benefit which offers them an advantage over some other countries. And while interest rates are expected to rise over the coming years, as they’ve been at all-time lows and the Bank of Canada has indicated the increases will be gradual, there appears little chance of a jolt to the system.

3. Multi-Cultural Country

Canada has been built on its diversity. Everybody is from somewhere else and they have a story to tell. This makes it much easier for foreign investors to feel comfortable and be able to familiarize themselves with the economic and social conditions that drive the country.

There are some dark clouds to keep an eye on, the most obvious is NAFTA. The United States has been hell-bent on ripping up a deal that, for most observers, has served the signatories well for more than 20 years. While parties have supported the need for some parts of the agreement to be updated, this does not appear to be sufficient for the White House.

Positive outlook for commercial real estate

As we look toward the second half of 2018 and beyond, most analysts offer a very positive outlook for commercial real estate in Canada, particularly in sites that offer potential for future development and densification – areas at the core of ReDev Properties’ business philosophy.

Commercial real estate offers investors, including high-net worth individuals, attractive risk-adjusted returns as opposed to the volatility of equities markets and the extremely low gains from bank deposits.

Therefore, commercial real estate can be seen as a middle way which offers attractive risk and return options along with cash-flow to a portfolio.

The key to success will be maintaining the high standards throughout the industry which have led us to this enviable position.