Canadian commercial real estate investors will come off the sidelines in the first six months of 2024, according to a new Altus Group report.

Most respondents to a quarterly Altus survey on conditions and sentiment said they intend to complete transactions after a prolonged period of muted activity. Intentions vary significantly according to company size, said Altus.

Meanwhile, the cost of capital is expected to stabilize. However, capital availability remains challenged in the near term amidst expectations of a shallow recessionary macroeconomic backdrop and a challenging operating environment.

Investors rank industrial and multi-family as the most favoured property types. Canadian investors are targeting returns of 11.6%. Financing, cost of capital and concerns are rated as the top issues. Regulatory and political risks have emerged as higher priority items, particularly in the U.S.

A report from PwC and the Urban Land Institute has rated industrial as the best Canadian commercial real estate investment bets in 2024. A Morguard report says that Canada’s commercial real estate market remains steady.