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The Real Property Association of Canada’s second-quarter sentiment survey gauged the mood of senior executives in Canada’s commercial real estate industry. The sentiment index has sunk to its lowest level in four years as a result of their concerns about the Canadian economy.
The Real Property Association of Canada’s second-quarter sentiment survey gauged the mood of senior executives in Canada’s commercial real estate industry. The sentiment index has sunk to its lowest level in four years as a result of their concerns about the Canadian economy.
(Michelle Siu for The Globe and Mail)

REITs vulnerable to higher interest rates

Real estate investment trusts are taking a hit as investors fret about higher interest rates, prompting analysts to weigh in with a variety of investment strategies.

The Canadian REIT structure is about to turn 20 years old, and for much of that time interest rates have provided a tailwind, RBC analyst Neil Downey points out in a research note. “We believe that higher interest rates, when they occur, will be a headwind for the entire listed property sector,” he writes.