Canada-Based Investors in Real Estate

by Jonathan Ma

  • 16 May 2012
  • RE

As of May 2012, Canada-based investors in real estate had an average allocation of 9.3% of their assets under management allocated to real estate. The average target allocation of these investors was 12.1%.

Upon examining the make-up of Canada-based investors, 20% of all investors had assets under management of less than $1bn, 35% had assets under management of $1-4.9bn, 15% had assets of $5-9.9bn, and 18% had total assets of $10-49.9bn. Canadian investors with assets under management of $50-99.9bn and over $100bn each accounted for 6% of all investors.

In terms of allocations to real estate, 25% of all Canada-based investors have allocated less than $100mn to real estate, 46% have allocated between $100-999mn, 15% have allocated $1-4.9bn, 6% have allocated $5-9.9bn, and 7% have allocated over $10bn to real estate.

Private real estate fund investments are being sought by 77% of Canada-based investors, while 2% are considering investing in the strategy. 20% are not looking to invest in private real estate funds while 2% have decided to no longer allocate to private real estate funds.

The most common strategy preference of Canadian private real estate fund investors is core, with 82% of these investors interested in core vehicles. The second most preferred strategy is opportunistic, with 46% of investors having a preference for such vehicles. 33% have an appetite for value added funds, 28% have invested in funds that adopt a debt strategy, and 26% have invested in a core-plus fund. 13% are interested in distressed funds, 8% in fund of funds vehicles, and 3% have invested in secondaries.

Direct real estate investments are also popular amongst Canada-based investors, with71% of investors actively investing in direct property. 27% of investors do not invest in direct real estate and the remaining are no longer investing directly in property. Listed real estate is the least popular investment route. Only 31% of Canada-based investors invest in public real estate while the remaining 69% do not invest in listed property.

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