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Multi-family, retail lead investor targets

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A study of Canada’s commercial real estate market by Altus Insite notes that multi-family investments pay the smallest returns but are seen as the most “stable property investment” in a generally optimistic market.

The findings are in Altus’ Investment Trends Survey, which polled 300 investors, managers, property owners, lenders and analysts on their take on the commercial market during the second quarter of this year. 

The survey found that yield for suburban multi-residential property ranges from a low of 4.4 per cent in Metro Vancouver to a high of 6 per cent in Halifax. This asset class remains popular as residential vacancy rates have been constantly declining nationwide.

Altus also found that investors are moving back to retail properties, perhaps because they are less optimistic about industrial and office sectors. 

Top-tier regional mall and food-anchored retail strip malls were the two most preferred asset classes in the quarter. Industrial properties continue to remain strong overall, Altus found, but the Toronto-based firm spotted a “slow down from earlier frenzy for industrial products.”

The firm's survey of investor sentiment found that nearly 40 per cent expect values to continue to increase and 57 per cent expect no change in values. Just 4 per cent expect real estate values to decrease over the next year.