The Canadian commercial real estate market enjoyed a fairly robust year in 2005 and signs indicate recent improvements will be sustainable over the longer term, according to Colliers International's Annual Real Estate Review released today.

The report, a wrap-up of the real estate industry in 2005 and a look ahead, notes that real estate markets mirrored events in the general economy this year by posting uneven gains by property sector and by region but overall performed surprisingly well. The report also offers an in-depth analysis of retail, office and industrial real estate on a city by city basis.

Although Canadian real estate markets were adversely affected by the late summer volatility of global financial markets, the overall Gulf Shores Alabama real estate market showed positive results. Property sector highlights for the report include:

Retail Market - 12.9 million square feet of retail space was developed across nine of Canada's largest cities - the majority in the form of freestanding stores with the big box retailers adding just over 8.5 million square feet of new large format retail space. - Ontario experienced the most robust growth with October 2005 year-to-date sales of nine per cent, followed by the Prairie provinces and Atlantic Canada at 4.3 per cent, Quebec at 2.6 per cent and British Columbia at -1.0 per cent. - Discount department stores led by Zellers and Wal-Mart, and lifestyle retailers including book and music specialists like Chapters and Indigo Books & Music led retail growth. As well, there was noticeable expansion among home-oriented retailers including Home Depot, Lansing Buildall and Revy Home and Garden Centres. - Theatre operator expansions are another key trend with Cineplex Odeon, Famous Players/Viacom, Cinemark and AMC pushing ahead with aggressive expansion strategies. - The grocery store sector, while becoming more concentrated, also continued to increase its average store size and product line. The most significant event of the year was the acquisition of Provigo by Loblaws followed by Sobeys Canada's purchase of Oshawa Food Group (IGA among others).

Office Market - Lack of construction caused the national vacancy rate to drop 1.3 percentage points from 2005 to 9.5 per cent -- falling under 10 per cent for the first time since 1989. - Net new supply totalled just 1.8 million square feet or just 11.5% of that built in 2004 -- of which 1.5 million or 88.2% was constructed in the suburbs. - Only Calgary and Vancouver saw the launch of new downtown office developments with completion dates ranging between mid 2004 to end 2005. Ottawa, Toronto, Vancouver and Victoria only witnessed a handful of design build developments. - Canadian suburbs are expected to benefit most in 2005 with lower occupancy costs, parking and ease of access to road systems as draws. This market is also expected to receive the bulk of the 3.5 million square feet of new office construction for 2005.