Coming off a "record-breaking" Q4-2019, real estate research firm Urbanation says commercial real estate sales began to taper off at the end of Q1-2020 to a total value of $3.9 billion across the Greater Toronto Area (GTA), representing an 8% increase year-over-year, while the total volume of sales increased 12% from a year ago to 318 transactions.
According to the firm's new report on GTA commercial property sales, the gains were felt across most municipalities in the region, with Peel recording the largest growth in Q1 with a 35% increase ($205 million in sales), followed by Toronto up 5%, $105 million, and Durham up 6% to $9 million.
READ: Toronto Home Sales Continue to See Improvement Through May
However, some cities experienced declines, with both Halton and York seeing "modest" decreases and Halton falling by 6% (-$16 million) and York by 3% (-$16 million).
Urbanation reported that GTA apartment sales experienced the largest growth during Q1-2020, climbing 49% year-over-year to $1.2 billion during the start of the year. The most notable sale was Freed Developments acquisition of 175 Wynford Drive for $102 million, marking the largest single sale recorded in Q1. According to Altus Group, the 5.42-acre site, which is improved with the Don Valley Hotel & Suites, has been zoning approved for two residential towers to be built on the excess land while maintaining portions of the existing structures on site.
When breaking down Q1-2020 property sales by sector, Urbanation says rental apartments experienced a growth of 209% year-over-year to $561 million, followed by house lots which increased 82% to $96 million, commercial land (26%, $63 million), and rural land (37%, $11 million).
Some sectors experienced annual declines, primarily office buildings which recorded a 43% decrease ($313 million), followed by industrial buildings (26%, $191 million; ), residential land (37%, $134 million;), and retail buildings (7%, $17 million).
The declines could be attributed to fewer businesses looking for office space as work-from-home orders were enacted, which saw essential businesses shut their doors and have employees work from home during the COVID-19 outbreak. Q2-2020 data will surely better capture the full impact of COVID-19 on the commercial sector.
