As seen on Bloomberg

Bentall Kennedy LP, the real estate arm of insurer Sun Life Financial Inc., is boosting its exposure to rental apartments as immigration in Canada’s biggest city booms.

The Toronto-based firm, which managed C$22 billion ($17 billion) of assets in Canada as of September, plans to increase multi-residential investments to about 15 percent of its portfolio from below 10 percent, according to Doug Poutasse, head of strategy and research at Bentall.

The “Canadian economy peaked but it is not necessarily coming off that peak, so we’re really at a very good spot right now,” Poutasse said in an interview at Bloomberg’s Toronto office. “The thing that we’re tracking, that’s the most positive, is the immigration population growth — it’s really accelerating.”

Canada is going through its biggest surge in international immigration on record with almost 100,000, or about a quarter, of those landing in Toronto in the year through July. That helped send rents for purpose-built units up 17 percent in the third quarter over the same period the prior year, according to research firm Urbanation Inc. Companies including GWL Realty Advisors Inc. and Tricon Capital Group Inchave also been expanding in the sector.

“Rents are still growing nicely — in fact, probably too strongly,” Poutasse said. “As a landlord, we like strongly, but for people, six, seven and eight percent rent increases are very difficult.”


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