Vancouver commercial real estate posted one of the strongest performances in Canada last year, with an average 13.7 per cent return on investment, according to the REALpac/IPD Canada annual property index.
Nationally, the annual total return was up sharply from 2009, which was negative at -0.3 per cent, and the 3.7 per cent return in 2008. Growth last year was underpinned by a 4 per cent capital growth and a 6.5 per cent income return. The index measured $97 billion of directly-held commercial real estate as at the end of 2010.
"A rebound in property values was entirely responsible for boosting the total return into double-digit territory in 2010," said Simon Fairchild, managing director of IPD North America.“The return to capital growth last year follows two consecutive years of write-downs worth 9.3 per cent at the all property level.”
Stronger returns were posted in all of the four major sectors. For the second year in a row, retail properties were the top performing sector with a total return of 15.6 per cent in 2010, followed by industrial property at 8.8 per cent, offices at 8.5 per cent and multi-family residential at 7.6 per cent.
Montreal led the six largest commercial property markets, with a total return of 14.2 per cent; Edmonton trailed in last with 6.5 per cent, the only market among the six where capital values did not show any recovery. Returns in the other three major markets were: Toronto (10.9 per cent); Ottawa (10.6 per cent); and Calgary (8.7 per cent).
