Canada’s real estate market is keeping a close eye on opportunities to reposition portfolios, according to PwC Canada and ULI’s Emerging Trends in Real Estate report.
“The coming year will be all about embracing opportunities to be resilient in the face of uncertainty, while shifting strategies in anticipation of market headwinds,” said Frank Magliocco, National Real Estate Leader, PwC Canada, in a news release. “For the first time in a few years, we’re hearing divergent views from industry players about issues like the future of office spaces and the urbanization and suburbanization trends.”
“The tension between longer term trends and fundamentals and short-term realities manifests in this year’s must-read report,” said Richard Joy, Executive Director of Urban Land Institute Toronto. “Prudency in the face of uncertainty, while dampening some sectors and trends, is accelerating and expanding others.”
In the report, warehousing and fulfillment centres were identified as the number one best bet as COVID-19 accelerated the already growing move to ecommerce – paving the way to increased warehousing space.
“Survey respondents indicated that malls with excess lands need to be re-imagined into residential or mixed-use properties, and possibly using some of that space for warehousing, distribution or fulfillment—including last-mile delivery—to satisfy the growing demand for online shopping. Grocery-anchored strip malls will fare best, as grocers have seen record sales during the pandemic,” said the report.
“The uncertainty around the return-to-office process sparked divergent views from interviewees. Some predict that employees and their strong desire for social connections will result in a return to the office, while others question whether the pandemic will spark a renewed interest in suburban office development, as some employees look to work closer to home and plan more work from home in the future. According to PwC Canada’s Workforce of the future survey published in September 2020, 34 per cent of employees said they prefer to work mostly or entirely remotely; 37 per cent want to be in the office most or all of the time, with the remaining 29 per cent looking for an even split between the two options.”