Law firm Bennett Jones predicts commercial real estate activity will pick up in 2010.
Toronto-based Bennett Jones, where former Bank of Canada head David Dodge, is now a senior adviser, issued comments on commercial real estate as part of a wide-ranging forecast on trends that will influence Canadian business in 2010.
"With renewed access to the public markets and improved borrowing costs, watch for an increase in activity levels by Canadian real estate entities both within Canada and internationally (particularly in emerging markets)," states the report. "Pension funds and other institutional investors will continue to seek the safe return of stable income-producing commercial real estate assets."
The outlook coincides with Dodge's prediction that Canadian economic growth will rebound to about 3.5% and the dollar will rise modestly on the strength of firming commodity prices, with the exception of natural gas, and a softening U.S. greenback. Dodge has warned that the U.S. commercial real estate market still faces a correction, he does not anticipate Dubai's economic woes to pose serious problems when it comes to raising capital for property investments.
Meanwhile, the Bennett Jones report predicts a greater proportion of restructurings and fewer outright liquidations as bank credit begins to loosen. It also anticipates more Alberta oilsands projects will get back on track, little in the way of tough new Canadian climate-change regulations while Washinton remains in "political gridlock" and more public-private-partnerships on infrastructure projects.
All of these factors will likely have at least an indirect effect on commercial real estate.
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