Canada’s commercial real estate sector poised for recovery and growth in 2022: Morguard

  • Collective rental fundamentals will gradually strengthen in 2022 as demand is supported by increased immigration and the easing of pandemic restrictions
  • Investment activity in office property has remained relatively subdued in recent years, mainly due to the somewhat uncertain outlook for the sector.
  • Industrial real estate is expected to continue to outperform in 2022, in line with the trend of near-record vacancy rates over the past few years
  • The fundamentals of the commercial real estate sector should gradually stabilize in the short term

MISSISSAUGA, ON, December 21, 2021 /CNW/ – Morguard Corporation (“Morguard”) (TSX: MRC) today released its 2022 Canadian Economic Outlook and Market Fundamentals Reportproviding detailed analysis of the Canadian real estate market in 2021 as well as trends to watch in 2022. Morguard’s 24and The annual edition revealed that investment performance remained strong in 2021 for industrial and multi-suite residential rental properties. Offices and retail showed signs of stabilization due to efforts to reduce the spread of COVID-19 and the subsequent easing of some restrictions. For 2022, Morguard forecasts an increase in investor activity following the expected full economic reopening after the pandemic. The full report with regional information and a video is available at

“Multi-unit residential and industrial rental properties are expected to continue to outperform office and retail assets,” said Keith Reading, director of research at Morguard. “As the economic situation improves in 2022, investors will broaden their investment horizons in 2022 as they seek to acquire more and more office and retail assets.”

Multi-suite residential real estate

Lower levels of immigration and post-secondary students entering the country throughout 2021 have contributed to reduced demand in the multi-unit residential segment. The national vacancy rate rose 1.0% year over year in October 2021 to a four-year high of 3.2%, with vacancy rates more pronounced in major metropolitan areas across the country. Despite the general slowdown, investment demand outstripped supply as continued strength in the segment kept investors interested. With the reopening of from Canada borders and the continued growth of employment, rental demand should grow gradually in 2022 and remain one of the preferred targets for investors.

Commercial real estate

Investment activity in the office segment in 2021 has been relatively subdued given the uncertainty as to when the pandemic restrictions will be lifted. A total of $1.9 billion office property sales were reported in the first half of 2021, down 37% year-over-year from $3.0 billion compared to the same period in 2020. In 2022, most tenants are expected to welcome their employees back into their physical office space after an extended absence. Thereafter, tenants will begin to make decisions about their longer term rental needs. In turn, activity levels and market conditions will stabilize. Investor confidence will rise as rental fundamentals strengthen, bringing a sense of certainty to the segment.

Industrial assets had record inventory levels across Canada in 2021. The national industrial availability rate recorded a low of 2.3% at the end of the first half of 2021 with even lower rates in Vancouver, Torontoand Montreal. Warehouses, logistics and e-commerce activities continued to grow at a relatively rapid pace, continuing the trend seen since mid-2020. As rental demand continues to outpace supply, tenants may struggle to find available industrial space in 2022 despite an expected pick-up in construction activity. Good rental prospects will continue to attract investment capital to the sector, resulting in record or near-record transaction volume in the coming year.

Continued restrictions for in-person shopping contributed to reduced retail segment activity in 2021. Short-term lease renewals and government assistance supported retail activity in Canada while throughout the year. Despite the support, the extended closures have contributed to declining revenues for owners and retailers and in some cases have forced independent stores to close permanently. Retail sector performance patterns will improve in 2022, as pandemic restrictions ease and shoppers return to malls. With a more confident outlook, assets with prime tenants will remain a prime target for investors. Rental market conditions should stabilize in the second half of 2022, after an initial period of adjustment.

Economic factors

from Canada the economy is expected to continue to rebound from the pandemic-induced correction in 2022, with output growing between 4.0% and 5.0% on an annualized basis. The services sector will be a key driver of growth in the year ahead, following a proportionally stronger expansion in the goods-producing sector in the early stages of the pandemic. Growth will continue at a more moderate pace in 2023, given the end of government support programs and the tightening of monetary policy.

In 2022, from Canada labor market will strengthen, driven by the broadly positive trend in economic growth. By the fall of 2021, the pandemic’s unprecedented job losses had been recovered, bringing the national unemployment rate closer to pre-pandemic levels.

Retail consumption and housing market activity will support economic growth in 2022, supporting broadly positive performance trends in the commercial real estate sector.

the 2022 Canadian Economic Outlook and Market Fundamentals Report is a detailed analysis of the 2022 real estate investment trends to watch in Canada. The full report, including analysis of real estate markets in Halifax, Montreal, Ottawa, Toronto, Winnipeg, Regina, Saskatoon, Calgary, Edmonton, Vancouver and Victoria, is available on

About Morguard Corporation

Morguard Corporation is a leading real estate and property management company in North America. It has extensive holdings in retail, office, industrial, hospitality and housing, held directly and through its investment in Morguard Real Estate Investment Trust and Morguard North American Residential REIT. Morguard also provides property management services to institutional and other investors. The portfolio of assets owned and managed by Morguard is valued at $19.4 billion. Please visit or follow us on LinkedIn.

Disclaimer of Forward-Looking Statements

Statements contained herein that are not based on historical or current fact, including, without limitation, statements containing the words “anticipates”, “believes”, “may”, “continues”, ” believes, “expects” and “will” and words of similar expression, constitute “forward-looking statements”. These forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. These factors include, among others, the following: general economic and business conditions, both nationally and regionally; changes in business strategy; funding risk; existing government regulations and changes to or failure to comply with government regulations; liability and other asserted claims; and other factors. Given these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements. The publisher assumes no obligation to update or revise any forward-looking statements.

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For further information: K. Rai Sahi, President and CEO, T 905-281-3800; Keith Reading, research director, T 905-281-3800; or email [email protected]

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