Foreign Investment in Canadian Commercial Real Estate Slides 70%
Foreign Investment in Canadian Commercial Real Estate Slides 70%
(Bloomberg) -- Foreign investment in Canadian commercial real estate dropped 70% in the first half of the year amid a scarcity of large portfolios for sale, data from Altus Group Ltd. show.
Transactions totaled C$1.5 billion ($1.1 billion), down from C$5 billion in the first six months of 2018, when Blackstone Group Inc. and Ivanhoe Cambridge Inc. bought a Canadian industrial landlord for about C$3.8 billion, Altus said.
The core assets that institutional investors favor, such as top-tier office buildings or rental apartments in urban areas, are in short supply on the Canadian market, according to Raymond Wong, vice president of data operations at Altus. As a result, sellers’ price expectations may be higher than what buyers are willing to pay, he said. Investors also may be more conservative because of concerns of a global economic slowdown.
This year’s tally will rise significantly when pending deals across Canada are completed in the coming months, according to Altus. Chicago-based Ventas Inc. announced in June that it would invest in a Canadian senior-housing portfolio valued at C$2.4 billion. Earlier this month, Bloomberg reported that Oxford Properties Group is close to a deal to sell its iconic Fairmont hotels portfolio to Singaporean sovereign wealth fund GIC Pte.
Purchases in the country by all buyers, including from Canada, totaled C$25.5 billion in the first half, down 28% from a year earlier, Altus said. Investment in rental apartments increased across Canada, while retail sales declined.
To contact the reporter on this story: Natalie Wong in Toronto at nwong133@bloomberg.net
To contact the editors responsible for this story: Rob Urban at robprag@bloomberg.net, Christine Maurus, Jacqueline Thorpe
©2019 Bloomberg L.P.