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Investors park cash in Canada

January 19, 2010

TONY WONG

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A survey says Canada is a key destination for investors in commercial real estate, a sector that took a hit in 2009.

TORONTO STAR FILE PHOTO

Foreign investors looking for global real estate investments have ranked Canada among the top three countries to park their money.

The U.S. and Germany were in first and second place, but Canada ranked third in the survey for providing the most “stable and secure” investment by the Association of Foreign Investors in Real Estate (AFIRE) released Monday.

Last year Canada placed sixth. Canada also ranked sixth as the country best seen as providing the most opportunity for capital appreciation. Last year Canada ranked 13th.

“Canada is a core investment for many investors who see our market for its stability,” said George Carras, president of commercial real estate consultancy RealNet Canada Inc. “This bodes well for the future, where we might see more interest from foreign investors this year.”

Despite the promising signs, 2009 was a dismal year for commercial real estate, particularly in the key Greater Toronto Area market.

There was $5.4 billion worth of investment volume in commercial buildings last year, the lowest figure in more than a decade.

“It was definitely a tough year, where a lot of investors just sat on their hands waiting out the market,” said Carras.

The market started to show signs of life in the fourth quarter, however, with an almost four-fold increase from the third quarter.

The biggest sale in the fourth quarter and for the year was 151 Front St. E. for $180 million to Allied REIT. Morguard Investments also purchased two office towers on Bloor St. for $164 million.

The international perception that Canada has withstood the economic downturn particularly well has been beneficial for the real estate markets here.

The perennial frontrunner, the United States, while still in No. 1 spot as being a stable market for investment at 44 per cent of the vote, is down from 53 per cent in 2008 and 57 per cent in 2010.

This is the first time that the United States, a place where investors have traditionally parked their money, has fallen below 50 per cent. Germany received 21 per cent of the vote and Canada was at 14 per cent.

The industry group predicts that 2010 will be a better time for the investment industry.

“Although foreign investors expressed every intent to resume investing in 2009, like everyone else their plans were sidelined by a paralyzed marketplace with no precedent and limited investment opportunities,” said Werner Sohier, chair of AFIRE.

“However new money is becoming available and the survey points to an increased focus and interest in a few select markets.”

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About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

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