Founder and partner of GreenOak Real Estate LP and former head of real estate for Morgan Stanley, Sonny Klasi, said that the commercial property market of Canada today is less appealing than the areas believed to be on the recovery stage such as the US and and Asia, especially now that investors are competing for assets.
Canada is less appealing because it?s too competitive and too expensive, Klasi explained during his speech at Queen?s University in Toronto, Ontario. Despite having been included on the list of ?recovering? areas, he believes that the US and Asia will still encounter challenges in the coming years.
Investments from retirement funds dominate the commercial real estate market in major cities in Canada. These retirement funds are Canada Pension Plan Investment Board and firms including Brookfield Asset Management Inc. and other real estate investment trusts. Klasi also shared that GreenOak will give its full attention on investing in office properties in the US and Japan, with plans of adding real estate assets in China, India and Europe in the next five years.
After his speech at the university, Klasi commented that Canada has a fair amount of capital despite it being a small country where there are only a few cities where people can choose to be in. They got private and public sector capital so whether it?s Brookfield or CPP, there?s more money here which makes it more difficult for foreign buyers to come in.
In his presentation Klasi pointed out that Canada has handled its Real Estate Investment Trusts (REITs), outperforming their US counterparts almost 13% on average since January 2008.
Original Article: Bloomberg
Photo Credits: TOTORORO.RORO (Away) via Flickr Creative Commons
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