Ottawa’s real estate market had a banner first six months of 2018, according to a report released Wednesday that said two landmark office building sales in 2017 have piqued investors’ interest in the National Capital Region.
With Ottawa offering a better perceived value than many other metropolitan centres in Canada, commercial real estate firm Avison Young said in its semi-annual investment report that outside investors were coveting local properties in the first half of fiscal 2018.
The sales of two “trophy assets” in 2017 – Investors Group’s $188-million deal in March to acquire a 50 per cent stake in Minto Place followed by the blockbuster $480-million sale of Constitution Square later that year – garnered a “great deal of attention” from outside investors, the report said.
Salus is in the beginning stages of planning the construction of a new build that will contain approximately 60 units, focused on the mobility needs of our aging population.
While these two deals skewed 2017’s total investment volume, Avison Young notes that the pace of activity thus far in 2018 has been greater year-over-year across most asset classes, with $610 million worth of property changing hands.
The retail segment led investment activity in the first half of the year, with the top deal going to Ogilvie Realty’s sale of an automobile dealership portfolio to a Toronto-based dealer for $76.6 million. Rounding out the top three were Fiera Properties’ $74.2-million acquisition of four buildings in Kanata North and Investors Group’s $68.2-million sale of an industrial portfolio to Desjardins.
Ottawa’s top investment sales by price, first half of 2018
Ogilvie Realty sells portfolio to Alpha Auto Group
Retail, $76.6 million/$358 per sq. ft.
Morguard sells four-building Kanata North portfolio to Fiera Properties
Office, $74.2 million/$216 per sq. ft.
Investors Group sells portfolio to Desjardins
Industrial, $68.1 million/$125 per sq. ft.
HOOPP Realty sells Polytek properties to Morguard
Industrial, $42.5 million/$175 per sq. ft.
Heading into the end of 2018, Avison Young expects the impending sale of the Jean Edmonds Towers to boost full-year investment activity if it closes before 2019. LaSalle Investment Management’s purchase of a reported $135-million stake in Minto Place, which closed after the first half of the year, will also serve to flush out year-end results.
Avison Young also noted in its report that asset values in Ottawa are being pushed up by development opportunities across the city, especially around the coming light-rail line. Brent Arseneau, leasing manager at Colonnade Bridgeport, told the Ottawa Real Estate Show last month that he expects the LRT to draw developers to opportunities around Tremblay, St. Laurent and Blair stations, raising demand for space in the east end.