Investors looking to make their best bets on Canadian real estate in 2022 should look to “beds and sheds,” according to a new PricewaterhouseCoopers (PWC) report.
PWC’s Emerging Trends in Real Estate 2022 report, crafted based on responses from investors, fund managers, developers, consultants, and other real estate industry professionals, identified ways investors are optimizing investment portfolios in the coming year.
“More than ever, it will be important for companies to embark on a transformation program focused on strategically managing costs and accelerating innovation and investment in the most promising business opportunities,” the report reads.
So what exactly are those promising opportunities? According to those interviewed for the report, “beds, sheds, and redevs” are the current best bets.
Two different categories of rental housing ranked high on the list of investments: moderate income/workforce apartments and single-family rental housing.
“The demand for more space is one factor raising the prospects for single-family rental housing, which can offer a more affordable alternative to buying a low-rise home,” the report reads.
Although the market for single-family homes is expected to slow down from the frenzy seen during the pandemic, it will still remain strong.
Creative reuses of aging or under performing properties that an investor may already own is another upcoming area of interest for investors.
“Owners of older, poorly performing retail properties might, for example, take a fresh look at how they can redevelop them to incorporate more promising uses,” the report says. “Real estate players struggling to find new industrial opportunities to develop could consider repurposing properties they already own for uses like warehousing, fulfillment, and last-mile delivery that are in high demand.”
Medical offices — an asset that’s attractive to many investors because of its stability — will remain of interest, particularly as the Canadian government continues to work with pharmaceutical companies to expand the industry in Canada to ensure the supply of products like vaccines.