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Canadian CRE Still A Strong Investment Play, Report Finds – Bisnow

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Canadian commercial real estate is well-positioned to survive and even thrive beyond a lengthy pandemic, says a new brokerage report.

“While the coronavirus will weigh on the Canadian economy through the second quarter, a recession is not imminent,” according to a a new Canadian coronavirus outbreak assessment from Marcus & Millichap.

“Expectations of weaker exports, reduced tourism and supply chain-related shortfalls will moderate the pace of economic growth, but low unemployment and comparatively strong consumption levels should offset the headwinds.”

Bisnow/Ian Johnston

Even during a pandemic, Canadian CRE remains a good long-term investment — unless things get worse.

Marcus & Millichap was quick to point out that the spread of the coronavirus, both globally and in Canada, could render any earlier expectations moot if it is not contained.

“Unless the outbreak amplifies significantly or confidence levels drop dramatically,” is the report’s major caveat.

“Things have changed so much in just a couple of days,” Marcus & Millichap Vice President Mark Paterson said. “We should have these [reports] weekly, not monthly, given the speed of change.”

Paterson said he does see a lot of CRE investment activity despite the volatile times, adding that bigger players like REITs are actually the cautious ones in these volatile times.

“We’re still doing trades. People are buying and selling. Everything is worth less today. But it’s more about fear and caution than reality. There’s still buyers out there, and there’s opportunity,” he said. “[REITs] are a little more reserved in this type of market. It’s the private clients who are taking the opportunity to buy. They’re still looking for a deal right now.”

The report said commercial real estate offers buyers stability, especially now. Apartments, office and industrial space are expected to receive little long-term impact from the pandemic.

“While the flow of goods from China may taper over the short term due to the shutdown of several Chinese factories, this poses little risk to industrial space demand,” the brokerage reports.

The retail and (especially) the hospitality sector remain riskier investments.

“The volatility of equity markets reiterates the stability of commercial real estate and the compelling 4-7% yields,” the report continues.

“Strong capital market liquidity and sound underlying real estate space demand remain pillars of support for commercial real estate.”

Canadian CRE Still A Strong Investment Play, Report Finds

Bisnow/Ian Johnston

Nathan Phillips Square remains deserted as Toronto citizens self-isolate.

Still, Paterson said he is cautious about things remaining in flux. One big unknown comes April 1, when rents are due everywhere. While the federal and provincial governments have moved to help out renters, including a temporary moratorium on evictions, how the landlords will react is still not known.

“Are [the landlords] going to be forgiving when it comes to rents?” Paterson said. “April 1 should be interesting. We’ll see at that point if people are getting out.”

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How Does Investing In Killam Apartment Real Estate Investment Trust (TSE:KMP.UN) Impact The Volatility Of Your Portfolio? – Yahoo Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If you're interested in Killam Apartment Real Estate Investment Trust (TSE:KMP.UN), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.” data-reactid=”28″>If you’re interested in Killam Apartment Real Estate Investment Trust (TSE:KMP.UN), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.

Some stocks mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said ‘volatility is far from synonymous with risk’ in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" View our latest analysis for Killam Apartment Real Estate Investment Trust ” data-reactid=”30″> View our latest analysis for Killam Apartment Real Estate Investment Trust

What we can learn from KMP.UN’s beta value

Given that it has a beta of 0.87, we can surmise that the Killam Apartment Real Estate Investment Trust share price has not been strongly impacted by broader market volatility (over the last 5 years). This means that — if history is a guide — buying the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, of course). Many would argue that beta is useful in position sizing, but fundamental metrics such as revenue and earnings are more important overall. You can see Killam Apartment Real Estate Investment Trust’s revenue and earnings in the image below.

TSX:KMP.UN Income Statement April 10th 2020TSX:KMP.UN Income Statement April 10th 2020

How does KMP.UN’s size impact its beta?

Killam Apartment Real Estate Investment Trust is a small company, but not tiny and little known. It has a market capitalisation of CA$1.8b, which means it would be on the radar of intstitutional investors. Small companies often have a high beta value, but they can be heavily influenced by company-specific events. This might explain why this stock has a low beta.

What this means for you:

One potential advantage of owning low beta stocks like Killam Apartment Real Estate Investment Trust is that your overall portfolio won’t be too sensitive to overall market movements. However, this can be a blessing or a curse, depending on what’s happening in the broader market. In order to fully understand whether KMP.UN is a good investment for you, we also need to consider important company-specific fundamentals such as Killam Apartment Real Estate Investment Trust’s financial health and performance track record. I urge you to continue your research by taking a look at the following:

  1. Financial Health: Are KMP.UN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  2. Past Track Record: Has KMP.UN been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of KMP.UN’s historicals for more clarity.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.” data-reactid=”53″>If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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Vietnam to disburse $30 billion of public investment funds this year to tackle virus impact – TheChronicleHerald.ca

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HANOI (Reuters) – Vietnam will aim to disburse $30 billion in public investment funds this year, up 67% year-on-year, the government said on Friday, as it seeks to boost an economy hit hard by the coronavirus outbreak that has infected 255 people nationally.

Public investment, excluding investment made by state-owned enterprises, often accounts for around one-fifth of Vietnam’s total investment and is spent on infrastructure and social development projects.

The Southeast Asian country’s gross domestic product in the first quarter of this year grew at its slowest pace in 10 years, at 3.8% due to the pandemic.

(Reporting by Khanh Vu; Editing by Muralikumar Anantharaman)

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Vietnam to disburse $30 billion of public investment funds this year to tackle virus impact – The Guardian

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HANOI (Reuters) – Vietnam will aim to disburse $30 billion in public investment funds this year, up 67% year-on-year, the government said on Friday, as it seeks to boost an economy hit hard by the coronavirus outbreak that has infected 255 people nationally.

Public investment, excluding investment made by state-owned enterprises, often accounts for around one-fifth of Vietnam’s total investment and is spent on infrastructure and social development projects.

The Southeast Asian country’s gross domestic product in the first quarter of this year grew at its slowest pace in 10 years, at 3.8% due to the pandemic.

(Reporting by Khanh Vu; Editing by Muralikumar Anantharaman)

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