Canada’s commercial real estate market got smaller in 2022, says MSCI.

The Canadian market dropped to ninth place from eighth overall with an estimated $403 billion in assets (all dollars U.S.) as its value fell by $44 billion, according to the data firm’s annual commercial real estate market size report. Hong Kong overtook Canada for eighth spot.

Globally, uncertainties surrounding slower economic growth, structural changes in working patterns, and new environmental and building standards are affecting portfolio construction, said MSCI in the report. Meanwhile, widespread rapid interest-rate hikes have drastically alterred the investment market, prompting a sharp decline in transactional volumes over the past year.

Canada had the fifth-largest drop in market weight, falling 29 basis points. The Canadian market suffered the second-largest negative, currency impact in comparison to the U.S. dollar, falling more than five per cent. Canada’s impact matched that of Australia.

Only New Zealand, a relatively small market, took a harder currency hit.