This year is shaping up to be much slower when it comes to commercial real estate transactions in Ottawa than in past years, according to an executive with one of the city’s top brokerage firms.
Nico Zentil, associate vice president with CBRE Ltd., said there hasn’t been as many transactions so far in 2013 and he’s not expecting tremendous leaps forward during the next four and a half months.
“When this year ends, we’re going to see a year that has been not as fantastic certainly as the last two years,” said Mr. Zentil. “We’re hoping volume will keep pace but I think everybody’s expecting volume to be short of where it was the last year in terms of total transaction volume.”
The brokerage firm reported a decline in the total value of investment in real estate in the city during the first half of the year. Investment in real estate in Ottawa measured $748,375,795 in the first six months, down from $926,256,879 in the same part of 2012.
Mr. Zentil cautioned against reading too much into those numbers, since one or two large transactions can move the needle significantly from one quarter to the next.
Nevertheless, those numbers do reflect the trend that he is forecasting for 2013.
There were a number of large deals last year that helped inflate the numbers, Mr. Zentil said.
Among these were Morguard’s sale of the Centennial Towers at 200 Kent St. to GWL Realty for $143.4 million, which helped to increase the dollar value of deals in the office sector.
Skyline REIT’s acquisition of 17 properties from Sheffield Management Corp. pushed up the amount of property changing hands in the industrial sector. Mr. Zentil says this provided a rare jump in the numbers, since industrial properties don’t change hands often in the Ottawa market.
Retail fits into a similar category, he said. There is a lot of demand for it but he doesn’t expect a lot of it will come available.
Mr. Zentil said there were a number of global factors contributing to the step down in local investment, including the volatility in the capital markets in July and a varying level of certainty in the economy as a whole.