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Thursday, February 29, 2024

Can a US non-public actual property technique assist Canadian traders now?

Whereas the fund being made accessible in Canada holds greater than these three asset courses, they do comprise the core of what Canadian advisors will have the ability to entry. Schaupp believes these three asset courses are nicely positioned within the present atmosphere.

Demographic shifts as child boomers age and gen Z enters the workforce level to a rising demand for condo housing — the continued scarcity in housing contributes to that demand as nicely. Deglobalization stays an enormous pattern, with many nations onshoring their storage and industrial capability, driving demand for warehouses. Life sciences actual property — which Canadians have a tough time accessing right here — is benefitting from each the ageing of child boomers who will want extra medical care, and the fixed innovation of the US healthcare sector. 

Dennis Tew, head of nationwide gross sales at Franklin Templeton Canada, contrasted this publicity with what Canadians presently have entry to. REIT investments, he famous, are comparatively widespread amongst Canadian traders. If traders presently have entry to non-public actual property, that can also be probably in Canada. The US non-public actual property market, he believes, presents a degree of diversification that traders want.

“This can be a pure step past Canadian actual property into an even bigger extra diversified pool just like the US with totally different alternatives,” Tew says.

Schaupp believes US non-public actual property property have returns profiles that Canadian advisors might discover enticing, particularly in an atmosphere of slowing development. These property include low correlations, low volatility, and powerful revenue. Traditionally, too, they’ve been a stable hedge in opposition to inflation. As advisors search for alternate options to the 60/40 portfolio Schaupp sees non-public actual property as a legitimate place, following the so-called ‘good cash’ of US institutional traders who’ve broadly allotted round 10% of their portfolios in direction of non-public actual property.

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