The Financial Post reports in its Friday, Sept. 2, edition that Canada's commercial real estate companies saw positive leasing momentum, strong rent collections and stable occupancy as they continued to battle back from the pandemic during the first half of 2022. The Post's Shantae Campbell writes that the question now is whether the momentum has legs in the face of rising inflation and a potential recession.
While Canada has outrun the worst of the forces buffeting the global economy, a disappointing gross-domestic-product print that showed slowing growth in the second quarter and an early reading of a contraction in July suggests the country's luck might be running out. However, some market watchers suggest at least parts of the REIT landscape should remain resilient, even if rising prices and rapid monetary tightening throw Canada into a downturn.
A report from CIBC Capital Markets in June noted REITs appear well-positioned to handle rising rates into 2026 for a number of reasons.
Those include the return to prepandemic operational performance and the way REITs tend to structure their debt, with only a portion rolling over and being subjected to potentially higher rates each year.
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