Canadian Real Estate Market Update – Q1 2023

Published May 29, 2023

Commercial real estate prospects face murkier conditions relative to the last decade as it continues to sort through, like all asset classes, the lingering effects of the Pandemic, increasing interest rates and capitalization rates and ongoing geopolitical uncertainty. In contrast, the broad fundamentals underpinning real estate remain robust. The land that houses the economy is finite and increasingly scarce relative to demand as Canada continues to grow its population by the fastest rate relative to its G7 peer countries. Also, if the world is heading into structurally higher inflation due to many trends converging as such, it is highly likely that real estate will outperform other traditional assets, such as equities and especially fixed-income investments on a long-term basis. This dynamic is likely to accelerate the trend toward more alternatives, particularly “real assets”, in pension plan portfolios.

In the current economic climate, capital allocation to “real assets” is more important than ever, and it is imperative to have an experienced manager who can not only outperform on Fund allocations, but also make informed and profitable property-specific decisions within various sectors. The Manager’s expertise in asset management, combined with use of its proprietary Target Markets Model, positions it favourably to manage the Fund’s capital allocations effectively, ensuring that its investments are aligned with its long-term objectives and protect capital value in the face of changing market conditions.

Read our quarterly Canadian Real Estate Market Update, produced by our Strategy, Planning and Analytics team, to learn more about the current state of the office, industrial, retail and multi-residential asset classes, and what to expect for 2023.