Investment in Winnipeg real estate saw a 12 per cent decline last year, with overall sales volumes of just $426 million – well below the five year average of $631 million.
The largest transaction of the year was the sale of the Allied Properties REIT’s Winninpeg portfolio to an out-of-province investor, a Colliers International report revealed.
Investment in the sector dropped $58 million from 2016 and a staggering $540 million from the province’s decade high of $966 million in 2014.
It is expected that investment in Winnipeg real estate will pick back up again in 2018, with “a number of larger scale listings currently being marketed, with strong buyer interest pursuing them,” according to the report.
“Moving into 2018 we do expect overall sales volumes to increase,” the report states. “Investor demand remains robust for high quality existing investment opportunities with stable cash flows and strong tenant rosters.”
Rising interest rates are not expected to alter capitalization rates on high quality investment offerings which exhibit stability and scale.
However, the report concluded that there would likely be a decline in the trading values of lower quality assets due to the pace of capital reinvestment required, increased borrowing costs and the reality of new supply across all sectors.
