Global uncertainty continues to wreak havoc on investors, as markets are dealing with political uncertainty, sizable economic shifts, and changing real estate markets. Although we have plenty of data to predict where we are going on a macroeconomic level over a long term period, the current narrative within the investment community is driving sophisticated investors towards sustainable investments, which instill trust and confidence. Commercial real estate is playing a big role in institutional investment portfolios, but it is where investors put their capital today, which will make all the difference over the next 10 years.
Here are the factors that make Western Canada a sound choice for deploying investor capital today:
Room for Growth
Canada has one of the lowest population densities in the world, which means we have substantial room for population growth, real estate growth, job growth, and economic growth. In Alberta, we still have significant infill opportunities, as well as increasing density in the suburbs which is good for enhancing the performance of local shopping plazas. All of these factors combine to provide high potential for ongoing stability and improvement.
Innovation is what sets apart cities and countries that continue to enjoy growth and over the long-term from those that don’t. It serves as a foundation for reinvention, evolution, and adaptation. Today, Canada is attracting the hottest global technology companies and is launching exciting startups. In addition to the start-up scene, Canada has leaders in the sustainable and green building space and is retaining its entrepreneurial talent, while attracting great minds from overseas. This is showing up in a variety of ways in Western Canada’s commercial real estate markets, including new retail mall trends.
Not everyone loves all of the efforts which have been made to moderate home price growth in Toronto and Vancouver over the last few years. Canada has proven again and again to maintain one of the strongest financial backbones on the planet. Recent moves may seem tough, but they are no doubt helping to keep growth consistent and sustainable. We’ve already begun to see the fruits of great long term planning. Look at Edmonton and its new core, as well as the LRT expansions which are supporting surrounding communities. Other building rules have helped to keep our neighborhoods interesting and thriving as new construction works to supply housing to the swelling population.
Recently we’ve seen sophisticated and institutional investors flee London and swarm the U.S. to pick the nation clean of housing, and even dive into exotic international locations for the promise of high growth, despite the equally high risks. Still, Western Canada continues to be a top choice among the savviest international commercial real estate investors. As current global trends continue to play out, don’t be surprised if even more seek to put their capital to work in Canada as they seek reliable investments, with an attractive outlook.