- What The lastest industry sentiment survey from Atlus Group suggests optimism is growing
- Why Three-quarters of respondents expect to be involved in dealmaking in the next six months
- What next Respondents expect the student housing sector to be among the best performing going forward
Commercial real estate pros in Canada are growing more confident about getting back to dealmaking, though concerns around capital and operating costs persist.
That’s according to the latest sentiment survey from Altus Group, based on data from 241 respondents, including senior executives, developers, brokers and appraisers from 89 firms. Nearly 40% have more than 20 years of experience, and 26% have 11 to 20 years in the industry.
Some 75% of respondents said they plan to buy or sell assets in the next six months, a jump of 10 percentage points from last quarter. Of that number, 40% said they would likely buy assets, up from 27% in Q2, while 14% said they would sell assets, also up from the prior quarter (9%).
“Respondents at small and mid-sized firms, those with less than $1bn [in portfolio value] reported the highest degree of buying intentions; while the largest firms (those with greater than $5bn [of portfolio value]) reported the highest degree of intentions to buy and sell,” Altus said.
The percentage of respondents who said raising capital would be their primary focus for the next six months ticked up 6 percentage points from Q2 to 21%. Nearly half of respondents (48%) said managing existing portfolios would be their main focus, followed by deploying capital (20%), reassessing (9%) and de-risking/divesting (3%).
Across property types, respondents were most excited about student housing, with 29% of survey participants placing it in the best performing category, up 10 percentage points quarter over quarter.
Confidence for industrial and multifamily properties, meanwhile, experienced the sharpest drops in investor confidence, though the vast majority of respondents continue to expect they will be the strongest performing assets over the next 12 months.
In terms of issues facing the sector, cost of capital remained the top-named item. That was followed by development and construction costs, operating costs, and capital and credit availability.
