The Canada commercial real estate market size was USD 66.60 Billion in 2022 and is likely to reach USD 128.65 Billion by 2031, expanding at a CAGR of 4.78% during 2023–2031. The growth of the market is attributed to the rising demand for commercial properties.
Commercial real estate is a type of property used entirely for business-related work or to provide a workspace instead of living space. Depending on the functions, commercial property is mainly divided into four classes namely office space, retail, multi-family rental, and industrial use. This four main classes of real estates are further fragmented into three classes namely class A, class B, and class C.
Class A represents best properties in terms of location, quality of infrastructure, age and aesthetic. Class B includes properties, which usually goes for restoration. Class C properties are aged, in need of maintenance, and located in less attractive areas properties. Typically, commercial real estate is rented to tenants for putting the area or space into income-generating activities to earn profit through their business operations. Commercial real estate is widely suitable for opening up various business centers including healthcare facilities, office space, restaurants, hotels, resorts, and all kinds of retailers. In comparison to the residential properties, however, to run a business operation in commercial real estate requires a large amount of capital and systematic engagement for various update business development policies. Publicly traded real estate investment trusts (REITs) is probably a more feasible mode for people to invest in commercial real estate.
The COVID-19 pandemic outbreak had negatively impacted on the market. During the pandemic, emergency lockdown imposed by government body had forced to temporary shutdown of hotels, malls, resorts, and gaming facilities as part of policies to curb the virus spread. Additionally, adoption of work from home policy by many business organizations across the globe resulted in the temporary closure of offices, which considerably affected the market. The market is expected to recover soon due to subsiding COVID cases.
Canada Commercial Real Estate Market Trends, Drivers, Restraints, and Opportunities
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Increasing new construction activity as well as expansion of new startups and small enterprises are key factors driving the market.
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Rising rate of expanding office spaces and convenient process of office lease renewals of the properties is projected to boost the market during the forecast period.
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High initial cost for investment in commercial real estate acts as a major challenge that can restrict the market growth in the coming years.
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Stringent regulations and lengthy process on the approval of commercial property is expected to hamper the market growth during the projected timeline.
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Surging technological advancements, rapid growth of tech business, and increasing expansion of tech talent are anticipated to create significant growth opportunities for the market.
Scope of Canada Commercial Real Estate Market Report
The report on the Canada commercial real estate market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
Attributes
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Details
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Report Title
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Commercial Real Estate Market - Canada Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Types (Hospitality, Offices, Multi-family, Retail, Logistics, and Industrial)
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Country
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Canada
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered in the Report
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Manulife Real Estate; WestBank Corp.; Maxwell Realty; Pinnacle International; Onni Group; and Amacon Developments
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Canada Commercial Real Estate Market Segment Insights
Offices segment to grow at high CAGR
In terms of types, the Canada commercial real estate market is divided into hospitality, offices, multi-family, retail, logistics, and industrial. The offices segment is estimated to grow at high CAGR during the forecast period owing to the significant rise in the demand of office space from tech companies. Moreover, emerging trend of co-working for sharing office space is driving the segment growth further. On the other hand, the multi-family segment is anticipated to register significant growth during the projected period attributed to the lack of rental supply, growing population, and rising homeownership costs. Additionally, the segment growth is further accelerated due to increasing investment for multi-family assets by various governments, impacted by high rate of immigration to the country.
Segments
The Canada commercial real estate market has been segmented on the basis of
Types
- Hospitality
- Offices
- Multi-family
- Retail
- Logistics
- Industrial
Country
Key Players
- Manulife Real Estate
- WestBank Corp.
- Maxwell Realty
- Pinnacle International
- Onni Group
- Amacon Developments
Competitive Landscape
Key players competing in the Canada commercial real estate market are Manulife Real Estate; WestBank Corp.; Maxwell Realty; Pinnacle International; Onni Group; and Amacon Developments. Companies are focusing on investment in new property builders to maintain their competitive position in the market. Companies have been widely engaged in strategic partnership, merger & acquisition, new product launch, and collaborations to boost their market share and acquire new buyers.
For instance, on 23rd February 2022, Garibaldi village I, 39402 square foot property located at Squamish, BC was acquired by Manulife Real Estate’s investment management. The nearby Garbaldi Village II was acquired by Manulife’s Canadian Pooled Real Estate Fund (MCPREF) in 2011. In December 2021, Manulife investment management announced a joint venture acquisition of development site located at Mesa, Arizona. The 56.5 acre site was acquired for worth USD 16.6 billion. The Eisenberg Company was a joint venture partner in the acquisition and the acquisition was aimed to build a 770,000 square-foot industrial property on the site.