Investment

Timing is good to invest in industrial workspaces – Investment Executive

Published

3 years ago

June 29, 2021

A shortage of industrial facilities during a period of economic expansion has created attractive opportunities for real estate investors, says Steven Marino, senior vice-president, portfolio management, with GWL Realty Advisors.

“We’ve been continuing to see substantive appreciation in rents across the asset class, and in many of our key metropolitan markets across the country there continue to be substantive supply constraints,” Marino said. “We’re seeing insatiable demand from large users of space.”

He said he has rarely seen such strong performance in industrial real estate.

“The performance we’ve been able to effect over the last couple years has been truly extraordinary. And, certainly, tailwinds continue to be in place for the foreseeable future.”

Marino takes a direct real estate investing approach, looking for opportunities in industrial, commercial office, retail and multi-family residential spaces. Each category comes with its own risks and rewards, he said.

When it comes to office space, he said the jury is still out on which changes to expect in the wake of Covid’s work-from-home mandates. Tenants may look for new workplace designs and amenities to meet changed employee expectations.

“Users are going to want real estate that creates value for their business,” he said. “So, maybe we’ll be changing the number of boardrooms that might exist on a typical floorplate. Maybe we’ll be changing the number of breakout areas that exist to help accommodate more collaborative sessions amongst workers.”

The pandemic was a painful experience for a lot of retail operations, particularly in enclosed spaces like malls, he acknowledged. But he was pleased with the performance of his grocery-anchored retail strategy, saying that such stores usually draw steady traffic.

“Grocery-anchored centres have performed exceptionally well,” he said. “They become key destinations that provide the ability for cross-shopping, ultimately driving sales for the entire centre.”

Finally, in multi-family dwellings, he acknowledged that some segments of society found it difficult to pay rent during Covid, but overall, rental collection remained robust through the crisis. The combination of government support, urban growth and strengthening local economies gives him confidence in the sector moving forward.

In Canada, the bulk of his investment follows his “MTV strategy” — Montreal, Toronto and Vancouver — and he also invests in Ottawa, Calgary, Edmonton and Halifax, as well as other communities.

“The economic outlook for Canada is strong, the attractiveness and stability of Canada’s financial system, together with a highly educated population, a strong immigration commitment and a transparent political system, positions Canada as one of the leading international targets for real estate investments,” he said.

Marino said he prefers direct investing as opposed to using instruments like REITs. Direct ownership creates an ability to drive performance at the property level, he said, as owners can acquire, lease, manage, and in some cases redevelop properties to drive income.

“It’s really a unique characteristic of direct real estate to have the ability to have these spaces completed to support their ongoing valuation,” Marino said. “By comparison, indirect real estate investing is generally valued on the basis of the market’s assessment or sentiment of market value.”

Direct investing also maximizes real estate’s historical value as a strong hedge against inflation, he said. And with inflationary pressures continuing to be felt in global markets, the prospect of interest rate increases remains on the horizon.

“It will certainly be interesting to watch to see how the Fed and the Bank of Canada will ultimately manage monetary policy moving forward,” Marino said.

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This article is part of the Soundbites program, sponsored by Canada Life. The article was written without sponsor input.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

7 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

4 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

1 month ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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