Montreal’s commercial real estate market is set to continue exhibiting considerable strength on the heels of a record-breaking 2017, according to market watchers at the recent Montreal Real Estate Forum.
Last year proved to be an “off the charts” outing for the city’s commercial property segment, with 1.5 million square feet of absorption of office space, including 680,000 square feet downtown, according to Lloyd Cooper, vice-chairman of office leasing (Montreal) for Cushman & Wakefield.
“It was one of the best years in a long time,” Cooper told Property Biz Canada, noting that while just a few short years back the word “Montreal” was never uttered in real estate forums, the city is now “on everybody’s radar.”
Cooper said that Montreal is still very much a tenants’ market, with “outward pressure from the suburbs and growing live, work, play areas such as Mile Ex keeping rents down.”
He also stated that from an investment point of view, Montreal is considered on par with cities like San Francisco and Austin.
“We’ve got a good supply of talent coming out of universities, which is driving demand,” Cooper explained, adding that many companies are magnetized to Montreal precisely because of that talented workforce.
“What happened with the tech buzz in Kitchener is exactly what’s happening now in Montreal,” Allied Properties REIT vice president Tim Low agreed.
A potential stumbling block might be the city’s property taxes, which remain elevated compared to the rest of the country, according to Bernard Poliquin, senior vice-president with Ivanhoé Cambridge.
“We’re disadvantaged by this in Montreal,” Poliquin said in the forum.
Fortunately, the combination of low unemployment rates, strong immigration numbers, and heated competition for talent will keep buttressing Montreal’s fundamentals for the foreseeable future, according to Brian Salpeter, senior vice-president with Cadillac Fairview.