“The common theme in office, retail, and residential is that it is no longer about space. It’s about the services you offer.”
The challenges facing Canada’s real estate industry continue to grow. Despite Canada’s low unemployment rate and signs of strength in areas spanning multifamily, industrial, and office real estate, we are finding a heightened feeling of unease among many in the industry.
With high asset prices and rising costs for land and labor, our survey reveals declining business prospects overall. As increases in foreign direct investment and a large amount of domestic capital crowd out smaller players, it is no surprise that our 2020 emerging trends barometer shows many in the industry are in a holding pattern.
In this year’s report, we take an in-depth look at the causes of the unease and some of the solutions available, including the following:
- Changing customer expectations, preferences, and behaviors. As sharing-economy concepts like coworking and co-living signal a new flexibility in how people look at real estate, companies are having to adapt their developments and spaces to respond by offering the top-quality amenities and services that customers have come to expect
- Technological pressures. Along with these changing customer trends comes the expectation of technology-enabled spaces. Integrating property technology (proptech) solutions is a major priority for industry players as they look for ways to better serve customer needs and drive efficiencies. More generally, technology is having both positive and negative impacts on business operations and physical space. The rise of e-commerce is leading to decreased demand for traditional retail space but is boosting the prospects for industrial properties and facilities that address last-mile delivery needs, while the growth of the technology sector is a major factor in the strong absorption of new office developments.