Apartment building sales in British Columbia break records in first half of 2021

0

Private buyers and financial companies are motivated to buy because borrowing costs are very low and rents are expected to rise sharply over the next five to ten years.

Content of the article

According to a recent investment report by Avison Young, the number and dollar value of residential apartment buildings sold in British Columbia in the first half of 2021 have broken records.

Advertising

Content of the article

“It caught us a bit off guard. I knew it would be a great year at the start of the year, ”said Rob Greer, director of Avison Young Commercial Real Estate. “But I definitely underestimated the amount of capital that was going to flow into our market here in British Columbia”

In the first six months of 2021, there were 78 sales valued at over $ 1.9 billion. The previous record set in 2018 was 85 sales valued at $ 1.51 billion, but for the whole year. The last half-year record dates back to 2015, with 54 sales valued at $ 1.04 billion.

Sales of multi-family properties in the first half of 2021 nearly exceeded British Columbia’s total annual investment for all industrial, commercial and office assets sold in 2014, which amounted to $ 1.95 billion.

Advertising

Content of the article

Greer said private buyers, but also financial companies such as institutional investors and real estate investment trusts (or REITs), are motivated by very low borrowing costs and the prospect of strong rental growth in the country. over the next five to ten years.

“In this inflationary environment in which we currently find ourselves, we anticipate a very rapid rise in rents.

Buyers, he said, also weigh the risk against buying other assets.

“Investing in rental apartments in British Columbia is probably one of the lowest risk profiles of any asset class today. “

Toronto-based Starlight Investments purchased two separate portfolios of multi-family apartments, in Vancouver and West Vancouver, and in Victoria and Esquimalt, through equity sales. And two Ontario REITs, Crestpoint Real Estate Investments and InterRent REIT, bought 15 rental properties in Vancouver for $ 292.5 million.

Advertising

Content of the article

Avison said they counted these three larger wallet purchases each as a single transaction, even though they involved groups of buildings. There were another 75 sales in the first half of 2021, enough to exceed the total annual number of multi-family sales in 2019 and 2020.

The typical deal was for properties between $ 5 million and $ 25 million, but there were two larger ones in Vancouver’s West End: Martello Tower, which sold for $ 135 million, and Park West, which sold for $ 40.8 million. Outside of Vancouver, Rainbow Plaza in Whistler sold for $ 41 million and Riverport Flats in Richmond for $ 45.5 million, according to the Avison report.

Greer said he expects the trend to continue, especially in many markets that “were perhaps previously ignored, such as Kelowna and Victoria and even submarkets like Langford.”

“These institutional groups that have really focused on Vancouver proper are now looking at tertiary markets as well.”

[email protected]


Start your day with a roundup of British Columbia news and opinions delivered straight to your inbox at 7 a.m. Monday through Friday by signing up for our Sunrise newsletter here.


Advertising

comments

Postmedia is committed to maintaining a lively but civil discussion forum and encourages all readers to share their views on our articles. Comments may take up to an hour of moderation before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread that you follow, or if a user that you follow comments. Check out our community guidelines for more information and details on how to adjust your email settings.


Source link

Share.

Leave A Reply