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While industrial property sales were down on a year-over-year basis, commercial/retail and office sales were up.
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Year-over-year growth in average lease rates reported on a per square foot net basis was mixed in July. Average industrial and office lease rates were down compared to last year, whereas the average commercial/retail lease rate was up.
“The July leasing numbers were a very good start to the third quarter and it is especially encouraging to see the industrial market segment leading the way. According to the Bank of Canada’s latest Business Outlook Survey, firms are expecting to increase their capital expenditures and employment levels over the next year. In many cases, this should translate into increased demand for space moving forward as well,” said TREB Commercial Division Chair Cynthia Lai.
There were a total of 50 industrial, commercial/retail and office sales reported through the TorontoMLS system in July for which pricing was disclosed. This sales result was down by 12 per cent compared to July 2012. While industrial property sales were down on a year-over-year basis, commercial/retail and office sales were up.
Average selling prices per square foot were down for industrial properties and up substantially for commercial/retail and office properties. Much of the change in average selling prices per square foot was due to changes in the type and location of property sold this past July compared to July 2012.
“A pick-up in leasing transactions moving forward would likely point to an increase in sales in some segments of the commercial real estate market as well. Businesses preferring to own their premises and investors seeking quality long-term returns on investment would be the foundation for this sales growth,” continued Ms. Lai.
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