Three Toronto Pre-Construction Projects Investors Should Consider
When investing in pre-construction, one of the biggest factors we take into account is the location of a project. The location you invest in should generally have Great transit connectivity, commercial/office space, greenery, and future development.
Master-planned communities bring some or all of the above into a location; therefore, master-planned communities represent a great long-term investment.
Other than the location, master-planned communities also provide an investor with “forced” appreciation. This happens when the developer raises the price in each phase of the master-planned community and sets a benchmark price each time. For example, an investor in the first phase of a project will purchase their unit at a lower price than an investor in the last phase of the project. The first investor can then access the difference in pricing by selling or refinancing their property.
Here are the top three pre-construction projects, listed in no particular order. We provide a comprehensive project analysis, highlighting unique opportunities and factors to consider for each project to assist you in narrowing down your search.
PICKERING CITY CENTRE - CENTRECOURT
Investing in CentreCourt's 55-acre master-planned community in Pickering is a standout opportunity for investors. This ambitious project will reshape Pickering into a vibrant city and a prime destination in the Durham Region. The first phase includes four high-rise towers among ten residential buildings. In the second part, there are plans for commercial spaces, a luxury hotel, and more. Over three phases, this master-planned community will receive 10+ mixed-use residential buildings.
CentreCourt has succeeded as a top residential developer in the Greater Toronto Area. It had no cancelled projects, and it is known for having all necessary permits and zoning in place. Furthermore, this project aligns with Pickering's robust growth goals, positioning it as the central hub of the Durham Region.
What sets this community apart is its comprehensive infrastructure and amenities, like high-order transit, a shopping mall with over 180 stores, restaurants, entertainment options, commercial offices, and abundant green space. The revitalization of the Pickering Town Centre mall adds to the allure. The location is strategically advantageous, offering direct access to the 401, the Pickering GO Station, and major bus routes. Future plans include a Bus Rapid Transit (BRT) line with 49 stops connecting Downtown Oshawa to Scarborough Town Centre, ensuring excellent connectivity.
Investors can also anticipate strong returns, with Pickering experiencing a condo shortage problem and a high appreciation rate PSFT of 10.1% YOY over the last five years. As for rent, the average condo rent in Pickering is over $2,700 and has been appreciating quite significantly. Although not as strong as other pockets around the GTA.
ARCADIA DISTRICT - ELLISDON
Arcadia District presents a remarkable opportunity to not only receive attractive returns but also contribute to a vibrant and evolving community. This thriving, master-planned development consists of four towers split into three phases, offering residents a premium living experience with an amenity club, on-site retail, commercial spaces, and a park dedicated to the community. What makes this investment even more enticing is the historical trend of strong appreciation returns associated with master-planned communities like Arcadia District.
The location of Arcadia District is a standout feature, with the recent expansion of Kipling Station just a short 5-minute walk away, providing seamless connections to TTC, MiWay, and GO Transit. The presence of Highway 427 and the Gardiner/QEW ensures efficient commuting in all directions. The new Civic Centre in the area will offer a place for people to gather.
What's even more unique is the developer, EllisDon, a renowned name with over 70 years of experience in construction. Their innovative partnership with SMEG for this project, the first of its kind in North America, adds significant value for investors when selling and leasing out their units for a premium, emphasizing a commitment to forward-thinking design and development.
Etobicoke City Centre, which has been designated as an Urban Growth Centre by the Province of Ontario, is in the midst of transformative growth, with substantial infrastructure investments and job creation opportunities. With approximately 60,000 new residents expected in the 2.5-kilometer radius and a significant provincial investment of $250 million, the area is set to flourish.
Additionally, the strong rental market in the GTA, with rents at $4.17 per square foot and a 6% growth rate over the past decade, adds to the investment's appeal.
Arcadia District offers not only a promising investment but also a chance to be part of the positive evolution of a dynamic community in a prime location. It's a unique opportunity to grow your portfolio and contribute to the ongoing transformation of Etobicoke City Centre.
LSQ2 - ALMADEV
LSQ2, a key element of the LSQ community, is an intricately designed project by Almadev. Almadev is a prominent real estate development and asset management company known for transformative ventures like Emerald City and Galleria on the Park.
This 30-story residential tower offers an array of social and wellness amenities strategically positioned for forced appreciation. Drawing on historical trends in master-planned communities, each tower, including LSQ2, establishes a benchmark price, ensuring sustained value and growth. LSQ, with 1.6 million sqft of master-planned excellence and 1600 residences across six buildings, promises a dynamic and evolving neighbourhood.
Situated in a central location with convenient access to shopping, dining, parks, and amenities, LSQ2 is well-positioned to benefit from substantial growth in the surrounding area. The Consumers Road Business Park, presently hosting over 20,000 jobs, is poised for significant expansion, creating an additional 13,500 job opportunities. With 4.5 million sqft of commercial office space in the vicinity, LSQ2 emerges as a solid and forward-looking investment, strategically poised to capitalize on the ongoing development in the area.
LSQ2 presents a compelling return on investment (ROI) proposition when compared to similar condos in the vicinity. While neighbouring condos trade at around $1,000 per square foot (PSFT) with a 6.5% appreciation rate, LSQ2 boasts an average price PSFT of approximately $1,200 and is scheduled to close in 2028. Historical data underscores the favourable appreciation returns associated with master-planned communities like LSQ over time. Additionally, the robust rental market in North York, where rates reach $4/PSFT, adds an extra layer of profitability for astute investors.
