Office properties offered the best returns for commercial real estate investors last year - and Edmonton proved to be the hottest investment market in Canada.
The 2012 REALpac / IPD Canada Annual Property Index shows that Canadian commercial real estate posted an annual return of 14.1 per cent.
Real estate outperformed public equities (7.5 per cent), bonds (3 per cent) and inflation (0.8 per cent), the Index reveals.
Looking at the 13-year history of the Index, 2012 was the 5th highest annual total return ever.
Examining the four major property sectors, residential registered the only increase in total return in 2012 (16.2 per cent, up from 11.9 per cent in 2011). Total returns for office properties, which spiked between 2010 and 2011, pulled back only slightly in 2012 to 15.9 per cent, while industrial and retail produced lower total returns in 2012 (11.8 per cent and 13.5 per cent, respectively) compared to 2011.
Of the six largest markets, Edmonton was the only metro that saw accelerating growth in value. Calgary, Toronto, Montreal, Vancouver and Ottawa all produced healthy but lower returns in 2012 when compared to 2011, according to REALpac/IPD Canada.
