Land sales continue to dominate commercial real estate investment transactions in the Greater Toronto Area
The third quarter of 2017 saw a total of 733 investment property sales transactions over $1 million, representing a record total investment value of $6.4 billion, with residential land sales once again being the most active sector, accounting for 33% of total activity
TORONTO ‒ Altus Group, a leading provider of commercial real estate services, software and data solutions, today announced results for the Greater Toronto Area (“GTA”) commercial real estate and land investment markets. The third quarter registered a total of 733 investment property transactions worth $6.4 billion, a slight increase of 5% from the previous quarter. Residential land was the most active sector with 33% of the overall activity, up 39% from the second quarter and up 106% from the same quarter last year.
Source: Altus Group
The office sector posted 57 sales transactions this quarter worth $1.4 billion, nearly the same as the previous quarter and up 19% from the same quarter last year. The most notable sale of the quarter was a 50% interest sale of Scotia Plaza, sold by Dream Office REIT to AIMCo & Kingsett Capital. The transaction amount was just over $681.5 million representing an adjusted price per square foot of $690.
The industrial sector remained strong this quarter despite a 5% decrease in investment volume compared to the second quarter. There were a total of 131 transactions worth $910 million, an increase of 49% from the same quarter last year. Pure Industrial Real Estate Trust (PIRET) ramped up their portfolio, being the purchaser in the three largest deals of the quarter. 100 Sandalwood Parkway West in Brampton was purchased from Orlando Corporation for a total of $101 million, representing a cap rate of 5.0%. PIRET also purchased 2777 Langstaff Road in Vaughan from Toys “R” Us for a total of $73.4 million, representing a cap rate of 4.77%.
There were 165 retail transactions that closed this quarter worth $708 million, down 15% from last quarter and up 29% from the same quarter last year. The most notable transaction of the quarter was Milliken Crossings in Scarborough, a retail plaza with nearly 140,000 square feet of leasable area purchased by Lesso Mall Development (Milliken) Limited for $45 million. The Vendor had acquired the property in August 2013 for a total consideration of $43,450,000.
For the second quarter in a row a record was set for ICI Land sales, with 100 transactions totaling $659 million in investment deals, up 13% from last quarter’s record high. The top transaction of the quarter was 250 & 252 College Street and 33 Russell Street, a 4.288 acre property which sold for $123 million to The Governing Council of the University of Toronto. The property is improved with five office buildings containing a total gross floor area of nearly 500,000 square feet. The property is subject to two long term land leases expiring in 2038. The vendor had acquired the property in 2004 for a total consideration of $16,333,000.
Once again, residential land remained the strongest sector for GTA investment property sales. There were 226 transactions worth a record $2.1 billion, a surge of 39% from the previous quarter. High density residential land accounted for a large part of the sales this quarter, with 62 transactions totaling over $920 million. The highlight transaction for this quarter was the sale of 5799 – 5915 Yonge Street and 46 & 47 Avrill Crescent, a high density site purchased by China Aoyuan Property Group for a total consideration of $200,800,000.
ABOUT DATA SOLUTIONS
Data Solutions connects the Canadian real estate industry through the delivery of data with unparalleled breadth, integrity and relevance. We cover new homes, investment transactions and commercial market inventory in key markets, and also provide intelligence on the national housing market and consumer home buying and borrowing patterns.
Our solutions are used by real estate industry stakeholders to gain market intelligence, identify and validate opportunities, benchmark, strategically plan, manage risk and more.
Data Solutions is part of Altus Analytics, the software and data solutions business of Altus Group, where our focus is to empower real estate clients and partners to work collaboratively to enhance decision making, drive performance and optimize transactional efficiency. Our solutions enable firms to better organize and manage data and connect with the right information and analytics to help them gain a complete picture of real estate assets, portfolios and transactions.
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ABOUT ALTUS GROUP LIMITED
Altus Group Limited is a leading provider of independent advisory services, software and data solutions to the global commercial real estate industry. Our businesses, Altus Analytics and Altus Expert Services, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain market insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,300 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest real estate industry participants across a variety of sectors. Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the TSX under the symbol AIF.
For more information on Altus Group, please visit: www.altusgroup.com.
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