CALGARY - The REALpac/IPD Canada Quarterly Property Index says Calgary had the best return on commercial real estate with a total return of 11.1 per cent for the year ending June 30.
The Canadian average was 9.5 per cent.
Other top performing Canadian centres included Edmonton at 10.8 per cent and Toronto at 10.1 per cent.
However, the annual returns - combining income growth and capital growth - were down from last year when Calgary experienced a 16.7 per cent hike followed by Edmonton at 15.6 per cent. The total return for all Canadian commercial real estate property was 13.3 per cent in 2013.
Over this past year, the report said Canadian real estate under performed public equities at 23.7 per cent (MSCI Canada Index), but outperformed bonds at 5.1 per cent (J.P. Morgan Government Bond Index seven to 10 years) and inflation at 2.4 per cent (Statistics Canada).
“While the annual rate of return at 9.5 per cent remains robust – and still indicates that capital values are rising across all four real estate sectors – the rate of growth over the past two quarters has eased,” said Simon Fairchild, executive director at IPD.
The report said the retail sector across the country continues to outperform other property types with an annual return to June of 11.8 per cent. The office sector was 7.7 per cent, residential was 8.1 per cent and industrial property was 8.6 per cent.
The REALpac/IPD Canada Quarterly Property Index measures over 2,343 institutional grade properties across Canada valued at $121.3 billion as of June 30, 2014.
By Mario Toneguzzi, Calgary Herald
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