BCBusiness Magazine - Current Issue -
[Cached Version]
Published on: 5/15/2003
Last Visited: 5/15/2003
"If the peak of the market is 12 noon, Vancouver is at 10 to 12," says Maurice Kagan, chief financial officer of Toronto-based Residential Equities Real Estate Investment Trust (RES Reit), one of two REITs which specialize in Canadian big-city apartments.RES Reit holds 58 concrete high-rise buildings but only one - the 470-unit International Plaza in North Vancouver - is in British Columbia.CAP Reit has no property at all in B.C., though it owns scores of apartment buildings across Canada.
"We have been trying to buy in Vancouver for five years, but you just can't make the numbers work," explains Kagan.Vancouver, he says, is dominated by "private, patient money that is willing to wait years and years for a return on investment."
Investors who can't afford to buy their own apartments could do worse than check out rental-linked Reits.RES Reit, for instance, has shown a 22-per-cent gain in income annually over the past two years and, after paying dividends, posted returns of 7.5 per cent, similar to CAP Reit's performance, in both 2001 and 2002."Right now you could buy 1,000 units for around $14,000 and make seven per cent to eight per cent on your money," Kagan explains.