Canada's Big Deal
German billionaire Klaus-Michael Kuehe closed a C$425 million deal for the Royal Center in Vancouver, Canada, from Brookfield Canada Office Properties at a near record-low cap rate. The price was several million dollars higher than local bidders. The 36-story office tower with retail and parking sold for C$725 psf for the office portion. This purchase sets the tone for a high-flying year of international commercial properties transactions estimated to surpass the previous record in 2007. In that pre-recession year, 7.5 percent of all deals over C$10 million came from international investors, according to CBRE.
Marks to Watch
Brexit is not affecting the office rents charged in London’s
skyscrapers. Rents in London’s tall buildings reached a record $114 psf in the first
half of 2016. Ranked No. 4 among the highest office rents in the world, London
still trails Hong Kong at $278.50 psf, New York City at $158.00 psf, and Tokyo
at $149.50, according to Knight Frank. “We have seen strong rental growth in
London’s skyscrapers over the past two years, and rents remain
resilient in spite of the economic uncertainty arising from the European
Referendum result,” says Will Beardmore-Gray, head of consultancy and
occupiers at Knight Frank in London.