VANCOUVER, Feb. 24 /CNW/ - Building on the record-setting first half of 2010, dollar volume in British Columbia's commercial real estate investment market reached $1.946 billion for the year - a new high-water mark for the province.
For the first time in the province's history, commercial real estate investment volume approached $2 billion in a 12-month period as 99 sales transactions completed. In the second half of 2010, the total volume of office, retail and industrial property sales was $920 million, almost matching the record dollar volume of $1.026 billion set in the first half. Total 2010 dollar volume easily surpassed 2009 and 2008 dollar volumes of $1.36 billion and $1.27 billion, respectively. The previous record was $1.53 billion in 2004.
These are some of the key trends noted in Avison Young's Year-End 2010 British Columbia Real Estate Investment Review, released today. The semi-annual report tracks office, retail and industrial investment property sales in BC greater than $5 million.
"All-time high dollar volume and transaction levels were indicative of the low cost of debt and redeployment of capital accumulated in the wake of the financial downturn of 2008," comments Avison Young Principal Bob Levine.
He notes that no single transaction skewed dollar volumes in any asset class in 2010 as had been the case in 2009. The record 2010 sales dollar volume, which was reached after a prolonged period of capitalization rate compression, can be attributed to the market's reinforced underpinnings, with investors showing much more confidence.
"Improved debt markets with fewer restrictions and reallocation of capital to targeted asset type investments propelled 2010 to new heights of commercial real estate activity in BC," he says. "Private purchasers were dominant in all asset classes more so than cash buyers such as pension funds, life insurance companies and REITs."
The greater availability of retail assets in 2010 boosted overall deal velocity and dollar volume. Comprising 40% (40 of 99) of all 2010 transactions and generating 59% ($1.148 billion) of total dollar volume, the retail asset class was by far the most active for all buyer types, particularly private and institutional investors.
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