Montréal offers a solid market for local and foreign developers, even in times of economic uncertainty.
The main real-estate indicators show that the Montréal market is solid during times of economic uncertainty and dynamic and profitable during economic upturns. As a result, Montréal offers local and foreign property developers:
- Relatively stable value and number of building permits, for both the residential and non-residential sectors, with rapid growth since the 2008 crisis.
- Canada’s second-largest market for office space, after Toronto, thanks to an inventory of 4,331,016 m² of class A and B premises. The city’s business district has seen its vacancy rate decline significantly, from 7.7% (Q4 2010) to 5.8% (Q2 2012). Large contiguous space has become harder to find, ground has been broken on a new 26-storey tower in the heart of downtown and rental space is being offered in mixed projects currently under construction. The gross rent downtown for class A buildings is about $448/m². Capitalization rates, both downtown and in the suburbs, are stable (5.75% to 6.50% for class A buildings downtown and 6.75% to 7.75% for the same type of building in the suburbs).
- A highly promising and varied industrial market, with an inventory of 27,642,788 m², making Montréal the second-largest market in Canada, after Toronto. The vacancy rate fell to 4.3% in 2012, leaving room for new construction in 2013. The variety and potential of the Montréal market stems from a number of ageing industrial tracts, among the oldest in Canada, that are gradually being converted to other, more intensive economic activities, and new construction to meet businesses’ latest needs. The average rent is up ($84.5/m²) but depends on location. The capitalization rate is stable, at 7% to 7.75% for multi-tenant class B buildings and 6.75% to 7.50% for single-tenant buildings.
- The property development market on Montréal Island is booming, and transforming the face of the city. There are currently 188 projects worth $5 million or more, for a total of $16.2 billion. Nearly 80 cranes dot the Montréal skyline. There are some major public-sector projects, but most have been initiated and carried out by and are intended for the private sector (residential, commercial and industrial).
- The Montréal market remains reasonable, nonetheless. The expected decline in housing starts, to avoid seeing the speculative home construction bubble burst, suggests that the market will adjust smoothly. Montréal property developers are remaining cautious, waiting for pre-sales to reach a satisfactory level before putting shovels in the ground. In other words, the market is adjusting, but remains healthy. In 2012, the volume of properties sold on Montréal Island grew by 1%, to $6.2 billion. Property prices continued to rise by 4 to 6% and the rental vacancy rate dropped from 2.5% in 2011 to 2.3% in fall 2012.
Communication Expert – Könige communications
Könige communications is a communication agency that distinguishes itself through its strategic communication approach and by its ability to achieve goals by offering clients a range of integrated services, such as communication counseling, branding, web strategies and design, public relations (press relations, speech writing, coaching) and event planning. Johanne Royer is the founding president of Könige communications. She is also the official representative of MIPIM in Canada.
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Sources: devencorenkf.com, collierscanada.com, cbre.ca, schl.ca, cigm.qc.ca and conferenceboard.ca