Canadian REITs will exhibit noticeable growth rates in 2017 - report

by Ephraim Vecina11 Jan 2017
Heightened demand and strong performance in the retail segment will fuel “high single digits and low double digit” growth in Canadian REITs this year, the Toronto-based Timbercreek Asset Management stated in its latest report.
Timbercreek senior managing director of investments and global head of securities Corrado Russo said that among the best bets would be REITs focused on major cities, as consistent demand would boost portfolios rooted in grocery- and pharmacy-anchored centres.
These factors would offset Calgary’s predicted occupancy struggles this year. Alberta remains on the bumpy road to recovery, and the provincial economy is not expected to find respite for some time.
“The demand that was created in the last oil cycle, in the boom … that was sort of a one time effect,” Russo told the Financial Post.
“You would expect retail to also be suffering,” he added. “But I’m not seeing any significant signs of that…. The well-located urban shopping centres that are more convenience-oriented are fine.”
On average, Canadian REITs yielded 14 per cent annualized return across the last 9 rising interest rate cycles over the past 40 years, the Timbercreek study noted.
REITs have been projected to generate returns of 8.5 per cent to 10.6 per cent globally.

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