Commercial real estate is an industry, therefore, like every other industry it gets affected by myriads of factors and the effect of these factors shapes the way the industry progresses. Canadian commercial real estate industry is no exception and there are factors that affect its growth and prosperity as well.
All the provinces of Canada have their respective central cities, which represent the overall growth and prosperity of the province. In this regard, the commercial estate situation in Toronto is representative of Canada in general and Ontario in particular. With regards to Canada and Ontario, the economy of the country plays and will continue to play a crucial role in the prosperity or failure of commercial real estate in 2015.
The Canadian economy in itself and the major economies of the world, both affect the commercial real estate market of Ontario. The Canadian economy is stable compared to rest of the economies of the world. Oil contributes to the economy of Alberta, technology industry is the major breadwinner for Great Vancouver, Atlantic Canada gets its economic boost from shipbuilding, while, Ontario gets its economic progress from the government spending and the financial sector of the province.
Similarly, the foreign economies, such as the increasingly becoming stable US economy, the rising economy of China and the confusing economy of Europe, all will have a direct impact on the Canadian economy. The Canadian economy will remain associated with one of these economies at every point of time, thus, allowing it to stabilize itself without experiencing greater loss or suffering grave recession.
The stability and growth in the economy means greater demand of skilled labour. The demand of skilled labour means an influx of immigrants and development of offices and businesses. Toronto at this point of time receives the greatest number of immigrants compared to other cities of the country. When such an influx comes to a particular city, the first industry that is concerned with it is real estate.
The commercial real estate investors and developers of Canada in general and Ontario in particular will face a great challenge in the year 2015. They will have to develop infrastructures at two levels. The first level is the development of residential infrastructure to provide accommodation to the influx of immigrants. This is a challenge because the real estate industry has to consider the demographics of the immigrants, the kind of living environment they prefer, whether they want to settle in downtown or suburbs and so on. The investors and developers will have to make infrastructural decisions after considering all these and other possible affecting factors.
The second level at which the commercial real estate developers and investors of Ontario face a challenge in 2015 is the development of office spaces. In order to do so, the real estate personnel have to consider both, the demographics of the immigrants as well as the business’s expectations from the workspace. Businesses want efficient utilization of the workspace, therefore, their office space expectations are way high compared to previous years. The expectations of businesses complemented by the diversity in immigrant demographics, pose a great challenge to the office infrastructure developers of Ontario in 2015.
In short, where the stability and prosperity in Canadian economy offer a better future to the real estate industry, it offers a great challenge to them as well. It is by overcoming this challenge of accommodating the high influx of immigrants and meeting the expectations of the businesses, that the commercial estate investors and developers in Ontario can have a prosperous future.