Secondary markets such as Halifax and Ottawa continue to hold appeal for national investors looking for income-producing commercial real estate.
?A stable secondary market like Halifax is less prone to the cyclical market variations that affect the major centres like Toronto or Vancouver,? Mike Beg, vice-president of corporate finance with
The stability of Halifax ? with its established public-sector workforce and the long-term prospect of the Irving Shipbuilding contract to build warships ? augur well for residential and commercial property developers, said Beg.
The latest figures and comments in a BMO Economics report suggest the continued strength in Canada?s real estate industry should appeal to investors looking for income-producing commercial real estate.
An expectation of low interest rates in the medium term was also cited by BMO as a significant factor to consider.
Market swings in the major urban centres can sometimes work to the advantage of developers in smaller cities, said Beg.
?There are situations where investor attention starts to divert to secondary markets.?
BMO Economics said investor interest is expected to remain solid into next year as momentum in Canada?s largest business centres continues to build.
In the Halifax area, this momentum will likely be reflected by increasing interest in single-family residential developments, and a dominance of new rental construction over condominiums, said Beg.
?Supply is following demand with residential apartment construction, and the sector will remain stable as new product is released.?
BMO Economics said Tuesday real estate development and management have been leading sectors in the Canadian economy on both the residential and commercial sides.
Earl Sweet, senior economist with BMO, said in a news release the commercial real estate industry benefits from the healthy condition of Canada?s financial institutions.
?Higher occupancy ? spurred by steady growth in employment, manufacturing, wholesaling and retailing ? is reducing office, industrial and retail vacancies, while lease rates are edging upward,? Sweet said.
Some large American retailers are targeting what they view as the underserved Canadian market for expansion, he said.
The report said downtown office vacancies are at low levels in Toronto, Montreal, Montreal and Calgary.
Source: http://thechronicleherald.ca/business/149916-bmo-touts-halifax-as-investment-site
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