Investor sentiment improves as BGO highlights opportunities in Canada's evolving real estate market
In an article by Benefits and Pension Monitor, Christina Iacoucci, head of Canada at BGO and a BPM Hot List 2024 winner, discusses the resurgence potential in the Canadian commercial real estate market.
She notes that central banks’ shift in interest rate policies has historically signalled an improved outlook for commercial real estate return performance.
Property fundamentals across sectors remain robust, with vacancy levels at or below long-term averages.
According to Iacoucci, “Valuations are likely at or near bottom for this cycle, and investor sentiment is improving.”
“Transaction activity is expected to rise as risk appetite grows,” Iacoucci says. She emphasises that opportunities exist for investors to acquire assets across a range of risk profiles at attractive prices.
She highlights that BGO is equipping investors with tools and strategies to navigate this positive investing environment effectively.
BGO, she explains, is leveraging its global perspectives and local expertise, combined with advancing in-house data science capabilities and AI-driven tools, to identify opportunities others might overlook.
She suggests investors should target sectors where negative sentiment may be overstated or generalisations have skewed market perception, offering chances for compelling deals grounded in solid fundamentals.
Current market conditions present opportunities for acquiring assets priced below levels seen in recent years. High-quality, stabilised properties in sectors with strong fundamentals are now available at below replacement cost and attractive initial yields.
“Robust data analytics and real-time access to market intelligence is how BGO thoughtfully deploys capital to increase income yield, strengthen tenant credit, and increase the value of assets,” she states.
Despite Canadian investors’ tendency to look internationally for diversification and higher yields, Iacoucci argues for a renewed focus on Canada, especially given rising geopolitical risks.
“As geopolitical risks are rising, we see global investors looking to Canada more than ever because of its stability,” she says.
According to BGO’s research, Canadian real estate offers superior risk-adjusted returns compared to other advanced economies, with asset prices experiencing their most significant correction since the 1990s.
Strong population growth continues to underpin healthy property fundamentals, creating a rare and advantageous entry point for investors.
This confluence of factors has, according to Iacoucci, positioned the Canadian commercial real estate market as a compelling choice for investors seeking stability and long-term growth.
