Real estate is in an asset worth considering, says Blair D. McCreadie, head of Canadian real estate at Standard Life Investments Inc. At the Insight Information’s ‘CAIP East’ session ‘Prospects for Real Estate Returns,’ he said it offers a consistent income over time and that income nudges up every year. And while interest rate volatility has hit bonds and REITs, direct real estate is well-positioned between bonds and equities. However, while the Canadian market was a global outperformer, “a fantastic asset class with a fantastic run,” he said, it started levelling out in 2013. He said this may be due to a “flight to quality.” Office vacancy rates are up and since it is tenant rents which provide investment return, this deterioration of the office market is having an impact. However, he said, the Canadian market is still a solid performer, it is just not a place for heavy yields.
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