The tech segment now serves as a vital bedrock of the Canadian commercial real estate sector, according to a new analysis by Marcus & Millichap.
In its newly released 2019 Commercial Real Estate Canada Investment Forecast study, Marcus & Millichap noted that tech firms’ demand for usable space will foster greater investment in the oft-ignored outskirts of major metropolitan markets.
“Elevated pricing expectations and fewer high-quality listings in downtown areas motivate investors to broaden search parameters to suburban locations near major metros. Higher yields beyond the urban core will be a large driver to sales activity in 2019,” the report stated.
Moreover, tech giants such as Microsoft, Google, and Amazon – which have already taken roost in Canada’s leading commercial markets – have been predicted to hire new workers in the tens of thousands over the next few years, as well as spend billions in office expansions during that same period.
“Microsoft currently has 2,300 employees in the country and 14,000 partners, which could grow to 60,000 overall jobs between employees and partners. Amazon will also grow substantially with plans for 6,000 new jobs across corporate offices in Vancouver and Toronto and multiple new fulﬁllment centres,” the report explained.
Toronto, as a globally acknowledged leader in innovation, will immensely benefit from this trend.
“Microsoft, Intel, Uber and others have plans to increase operations in the city and bring on new workers. Additionally, in recent years an abundance of international retailers have made a push into Canada, often landing on Toronto when deciding on their ﬁrst location in the country.”
“Sidewalk Labs, a sister company to Google, will undertake one of the greatest projects as they transform Toronto’s waterfront to a smart city of the future, which will be anchored by Google’s new Canadian headquarters.”
Montreal hosts two of Canada’s top-tier universities, along with a burgeoning artificial intelligence R&D scene. This is “encouraging the development of new purpose-built rentals to meet the growing demand. Rental rent growth will remain robust this year despite a new delivery high for the current cycle, drawing more investment capital to the apartment sector.”
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