Two of the largest pension funds of Canada say that it becomes more difficult to justify real estate south of the border in real estate, but the enormous market unit keeps the United States on their radar.
Real estate manager from the health care of Ontario Pension Plan (HOUPP) and Alberta Investment Management Corp. (AIMCO), members of the Canadian Maple eight with almost $ 300 billion in assets between them at the end of the year, announced a NAIOP real estate conference, known as the commercial real estate development association, which they describe in further investments.
Sarah Esler, managing director and head of the mortgage investment at Aimco, said her group was surprised that the construction costs only increase by one percent to three percent, but they see that these numbers grow.
“We are still waiting to see what happens in the next bit. In the close perspective, she has shifted a little of our investment strategy where we are investing new financing today,” she said during a panel discussion about tariffs.
Alberta Pension Fund's executive said that workers could affect construction costs and realizes that 15 percent of employees in the United States are eliminated without papers.
“We saw that Labor does not appear to locations. They are afraid that people will be deported,” said Esler. “New building, you really have to pay attention to who your contractor is and have good access to workers.”
Esler emphasized that Aimco was an investor in the United States to return the global financial crisis, but today money changes to Canada and faces a more competitive environment.
“We still like the USA, and we are interested in developing our program there, but we find a challenge, are Hedge costs,” said Esler and added the difference in the interest rates between Canada and the United States. “It makes it almost impossible for us to make money in this market. So we have changed our strategy more towards Europe.”
Eric Plesman, Global Head of Real Estate at HOUPP, said that the uncertainty caused by tariffs led to the pension fund suffering its portfolio.
“There are no new shovels in the ground unless everything is left,” said Plesman and spoke to the lack of appetite in the pension fund to build something speculative.
Plesman found that the reluctance to invest south of the border is not just in Canada. Section 899 In the great beautiful bill, which would have imposed a withholding tax on pension funds and others, people frightened, even though this piece of legislation has been withdrawn.
“Our perspective is that you intend to collect almost 120 billion US dollars for the US Finance Ministry. If you remove it with all my heart, the question arises as to try to try to compensate for this deficiency?” told the Plesman that the United States needed this money to finance its tax cuts. “That is why capital flows do not go at the same level in the United States as before. When I look at our own book, the bar is quite high (for a new US investment).”
Plesman said Canada looks like a better place to invest, and the same applies to Europe, also for Asia.
“I heard that from some European investors. You simply changed your allocation, which otherwise prompted you to come to Canada,” said Plessiman, adding that the economic picture in Canada is not great, but the country has stability. “” This is an important attribute. ”
Kevin Gorrie, the managing director of the Granit Real Estate Investment Trust, based in Toronto, which has an industrial portfolio of 65 million square meters, whereby more than half of them are no more than half of them in the United States
“Everything is associated with a price,” said Gorrie, adding that in some parts of America he sees changed opportunities. “The pricing has opportunities in some markets. I think there are opportunities in Europe.”
The riding manager said that the tariffs had not had the expected effects, but shifted the demand in the USA from places such as Los Angeles, New York and New Jersey, which imported, into places like the southeast.
Gorrie noted that some institutional American inventors return to the Canadian market after years of leaving the market for other reasons. “We are slowly starting to see a return of the US investors to Canada. I think they like the stability,” he said.
• e -Mail: gmarr@postmedia.com