Canada’s bullish commercial real estate market is expected to continue its historic run – that is, if automation of jobs doesn’t depress demand for office and retail space.
Continuously low vacancy rates in multi-family, downtown office and industrial sectors will keep the Vancouver market performing strong into next year, Paul Morassutti, executive managing director of CBRE assured attendees at the firm’s November 1 market outlook event.
At the event, Morassutti addressed a few possible dark clouds on the horizon, offering confidence in market adaptability.
“If machines can review mountains of legal documents in seconds rather than days, what does it mean for clerks and paralegals?” he said “Will all these firms permanently shrink? Is demand for space being permanently eroded?”
While demand could be temporarily affected if traditional office jobs get replaced or reworked by technology, CBRE believes Canada’s commercial real estate sector is resilient, so long as office developers and owners are flexible.
“If firms, and by extension, landlords, are offering generic ‘cube farms’ to work in, good luck with that,” Morassutti comments. “Dynamic and unique office space will become increasingly key in attracting and retaining the best talent in the market.”
Some analysts worry that the long-term success of Canada’s commercial market suggests its glory days are numbered – again, CBRE is not convinced.
“There is nothing magical about the passage of time and bull markets don’t just simply die of old age. Despite the age of this cycle, fundamentals still matter, and the market fundamentals in Canadian commercial real estate are about as solid as you’ll find anywhere in the world.”
