‘More flexibility’ cited as a key to attracting more lender money for London projects

New CBRE data shows lenders who manage big money are prepared to free up that money for Canadian commercial development. Gerry Dewan explains.

They are international players that manage big money and it appears they’re prepared to free up more of that money for commercial investments in Canada.

London’s deputy mayor is confident the city is creating conditions to attract more of that money.

Commercial real estate specialist CBRE surveyed 47 lenders and 81 per cent reported that they’re increasing budget allocations to back credit for commercial projects in Canada.

“Canada, within the context of global financing, continues to be a solid, stable, defensible, dependable country,” said Joshua Sonshine, vice president with CBRE Capital.

Sonshine said the struggling office space sector appears in line for a boost, with 47 per cent of lenders saying they interested in funding the sector, “That is the largest single growth year over year we’ve seen for that asset class on record.”

The highest interest for lenders is in multi-unit residential. High density rental properties being backed by the federal government with the support of the Canada Mortgage and Housing Corporation (CMHC).

According to Sonshine, “Rental product is undersupplied in many markets, and there is definitely a stated need to continue to do that.”

Vancouver is attracting the highest interest from lenders, followed by Toronto.

Despite having the highest population growth by percentage in Ontario, and having vastly improved building permit approval metrics, London continues to be middle of the pack for mid-sized Canadian cities when it comes to lender interest.

One initiative launched by the city is giving developers incentives to build along Bus Rapid Transit (BRT) routes.

Deputy Mayor and Ward 2 Coun. Shawn Lewis said that program has been a success. Now he’s looking to more flexible zoning rules that are being studied by the city.

He believes that could also help attract interest, “If we simplify that, if we get those commercial zones down to say, four instead of 14 and allow a lot broader range of uses on a given property, that will make it more attractive.”

He points to the 100 Kellogg Lane property, which shifted from industrial to a commercial space, incorporating attractions like the London Children’s Museum, The Factory family entertainment centre, and the Hardrock Hotel.

“That was a one-off project. But if we can do that with our zoning more across the city for more flexibility, I think that is the key to bringing more investment dollars into our city for commercial,” he said.