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By Allison Lampert
MONTREAL, Feb 5 (Reuters) - Canadian investment in the
Manhattan commercial property market is expected to stay strong
this year after quadrupling to hit a record in 2015, real estate
specialists said.
Canadians accounted for almost a third of the $25.6 billion
in foreign capital that poured into Manhattan commercial
properties last year, with investment swelling to $8.3 billion
from $1.97 billion a year earlier, according to data from Real
Capital Analytics.
In comparison, investment from other countries more than
doubled during the period, the data showed.
"The trend will continue in New York," said Ric Clark,
chairman of Brookfield Property Group, a real estate division of
Toronto-headquartered Brookfield Asset Management BAMa.TO .
"We're in growth mode in Manhattan."
Brookfield Asset Management is Manhattan's second-largest
landlord, in all asset classes, after the City of New York,
according to CoStar Group Inc CSGP.O commercial real estate
data compiled by Cushman & Wakefield.
Brookfield has both bought buildings and announced plans to
construct new ones. Brookfield Property Partners BPY.N , a
spinoff of Brookfield Asset Management, is now building a
62-storey residential tower as part of its $4.5 billion
multi-use Manhattan West development.
Ivanhoe Cambridge, the real estate arm of Quebec's largest
pension fund manager, also ranks within the top 10.
In January 2015, Ivanhoe said it was buying 3 Bryant Park, a
Manhattan office property, for a near-record $2.2 billion.
Brian Kriter, a Canadian senior managing director of
valuation and advisory for Cushman & Wakefield, said New York
City should remain the top market in the world for Canadian
property investors such as pension funds. He said the city now
has over $15 billion worth of commercial real estate that is
available but not officially on the market.
"We also expect to see more mega-deals as Canadian investors
are in a flight to quality," Kriter said.
During the first nine months of 2015, cross-border capital
accounted for 29 percent of investment volume in Manhattan, up
from 19 percent in 2014, according to data from Cushman and Real
Capital.
Rising purchase prices and a weaker Canadian dollar
CAD=D4 , which fell more than 16 percent against the U.S.
dollar in 2015, have not discouraged investors who see the value
of steady returns from rising Manhattan rents, Clark said.
For example, between the third quarter of 2013 and the third
quarter of 2015, average starting rents for office space have
increased over 13 percent in midtown Manhattan to $75 per square
foot, Kriter wrote, citing Cushman data.
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(Editing by Paul Simao and James Dalgleish)