Commercial Real Estate - Canada | Statista Market Forecast

The Canadian Commercial Real Estate market market is anticipated to achieve a value of US$1.91tn in 2024.
It is predicted to exhibit a compound annual growth rate (CAGR 2024-2029) of 1.80%, leading to a market volume of US$2.09tn by 2029.
When compared globally, the United States will generate the highest value in the Real Estate sector, reaching US$25.3tn in 2024.
Commercial real estate in Canada is experiencing a surge in demand as foreign investors seek stable and profitable investment opportunities.

Definition:

Commercial real estate can be defined as properties that are used for business purposes, such as office buildings, retail spaces, warehouses, and industrial properties.

Additional information:

The commercial real estate market contains the value of commercial properties as a key performance indicator. This is the worth of all office buildings, retail spaces warehouses, and industrial properties for the timeline of our data coverage.

Office buildings
Retail spaces
Warehouses
Industrial properties

Residential real estate
Publicly owned buildings used by the local government
Buildings used for public health care services

The Commercial Real Estate market in Canada has been experiencing significant growth and development in recent years.

Customer preferences: Customers in the Canadian Commercial Real Estate market are increasingly seeking modern and sustainable properties. They prioritize energy efficiency, green building practices, and the integration of technology in their properties. This shift in customer preferences is driven by a growing awareness of environmental issues and the desire to reduce operating costs. Additionally, customers are looking for properties that offer flexible spaces and amenities that enhance the overall experience for tenants and employees.

Trends in the market: One of the key trends in the Canadian Commercial Real Estate market is the rise of mixed-use developments. These developments combine commercial, residential, and retail spaces in a single project, creating vibrant and dynamic neighborhoods. This trend is driven by the desire for convenience and the need to maximize land use in urban areas. Mixed-use developments also cater to the growing demand for live-work-play environments, where individuals can live, work, and have access to amenities within close proximity. Another trend in the market is the increasing demand for office spaces in major cities, such as Toronto and Vancouver. These cities are experiencing strong economic growth and attracting businesses from various industries. As a result, the demand for office spaces is outpacing supply, leading to rising rental rates and low vacancy rates. This trend is driven by the concentration of talent, infrastructure, and business opportunities in these cities.

Local special circumstances: One of the unique aspects of the Canadian Commercial Real Estate market is its diversity across different regions. Each region has its own economic drivers, industry clusters, and market dynamics. For example, the commercial real estate market in Alberta is heavily influenced by the oil and gas industry, while the market in Ontario is driven by the financial services and technology sectors. These regional variations create opportunities and challenges for investors and developers, as they need to understand the local market dynamics and tailor their strategies accordingly.

Underlying macroeconomic factors: The growth and development of the Canadian Commercial Real Estate market can be attributed to several underlying macroeconomic factors. Firstly, Canada has a stable and resilient economy, which attracts both domestic and international investors. The country's strong economic fundamentals, including a skilled workforce, political stability, and sound financial system, make it an attractive destination for business and investment. Secondly, low interest rates have played a significant role in fueling the growth of the commercial real estate market. Low borrowing costs make it more affordable for investors and developers to finance their projects, leading to increased activity in the market. Lastly, population growth and urbanization are driving the demand for commercial real estate in Canada. The country's population is growing, particularly in urban areas, creating a need for more commercial spaces to accommodate businesses and services. This trend is expected to continue in the coming years, further boosting the growth of the commercial real estate market in Canada.

Data coverage:

Figures are based on value of commercial real estate.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach. As a basis for evaluating this market, we use national statistical offices. Next, we use relevant key market indicators and data from country-specific associations such as share of industry, manufacturing, and services of the GPD, price level index, GDP. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the market, for example, exponential trend smoothing.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

After a challenging period during the coronavirus pandemic, the European commercial real estate sector now faces additional pressures, including inflation, record-high interest rates, and sluggish economic growth. In 2022, these challenges were evident through contracting investment volumes in the two largest markets—the United Kingdom and Germany. Although the shifting economic landscape has impacted all commercial real estate subsectors, industrial and logistics—a property type that demonstrated incredible resilience during the pandemic—continues to be the most popular investment class. The performance of the sector is closely tied to the state of the economy, explaining why cities with flourishing capital markets garner the most interest from investors. In 2023, investors identified London, Paris, and Madrid as the three most attractive markets.

Growing demand for industrial and logistic real estate is prominent in Europe, driven by the increase in online retail sales rather than in-store. All the Nordic countries saw steady growth in their e-commerce sales during the past fifteen years and more, and the growth is expected to continue. Investments in the industrial and logistic real estate industry have generally been at a higher level during the last few years. The highest investment value among European countries in the first half of 2021 was in the United Kingdom, while Sweden topped the list among the Nordic countries, and was fifth in terms of industrial and logistics investment in real estate in Europe that year.