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The Institutions Sell, the Privates Buy

Research Weekly Insights Soneil Acquisition Highlights Hero
Our friends at Manulife just sold a portfolio to Soneil, a GTA-based private investor. This is a trend throughout the investment market: private investors taking a larger and larger share of market, as institutions sell or sit on the sidelines. (I’m not sure why the seller isn’t listed in the article – it’s clearly Manulife as you can confirm in CRM+).

For the buyer, there’s the value of the existing asset, and also redevelopment potential. The CEO mentioned ”future development potential along transit” and ”there will be a much higher and better use for those buildings,” so it’s an assembly strategy. For the seller, industrial values are up tremendously, which makes profit taking attractive. There’s also a suburban office, which is similar: adjacent to properties Soneil owns.

Institutions have been less active on the buy side than pre-COVID, and this year it’s even more extreme. Now, we’re only 4 months into 2023, so it’s not quite a fair comparison – a big deal could change this number dramatically. But you can see the trend beginning years ago. The big players like pension plans and lifecos have shifted towards international acquisitions, or more niche areas of real estate like lab space and retirement homes. The previously ”core” assets of retail and office have been left to the private buyers. Perhaps industrial is the next frontier for private investor dominance.

Research Weekly Insights The Instution Sell the Private Buy Graph 1
 
Summary
Private investors have increasingly dominated the ”buy side” of the investment market since the start of the pandemic. The sale of Manulife industrial properties to Soneil continues the trend of selling by institutions to private investors.

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Pour plus d’informations, veuillez contacter:

Adam Jacobs

Head of Research | Canada

Toronto Downtown

Colliers Canada's head of research, leading a cross-country team of 20 mapping, analytics and research professionals. Formerly head of Canada research at Cushman Wakefield and Director of Analytics at Oxford Properties. Featured in mainstream publications such as the Toronto Star, industry publications and podcasts. Specializing in the big picture and the fundamentals driving real estate - demographics, the macro environment and the global economy. 

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