By Ian Ardill

If you have picked up a financial publication or scanned industry news lately, you might think Private Canadian Real Estate Investment Trusts (REITs) are dead. A lot of investors currently feel that Canadian REITs are no longer attractive, largely due to the widespread lack of liquidity across the Canadian market system. Although having your capital locked up certainly does not feel good, the essential question becomes: how should an investor truly feel about their investment in a Canadian REIT?

Shift from Growth Tool to Defensive Play

Traditionally, Canadian REITs were utilized primarily as a growth engine complemented by steady income. However, as the real estate market softened, REITs became increasingly less attractive from a pure capital growth standpoint, prompting a surge of investors wanting to exit simultaneously to regain liquidity. As a direct result, many funds gated or restricted redemptions, increasing investor dissatisfaction across the board.

• Impact on Major Private REITs: This liquidity pressure has notably affected Canada’s two largest private REIT offerings -Centurion Asset Management’s Centurion Apartment REIT and Avenue Living’s Core Trust.
• The Defensive Business Case: Is there still a place for REITs in a portfolio? Multi-residential REITs have temporarily shifted from being pure growth engines to defensive income investments with future growth potential. Multi-residential housing possesses key defensive strengths, including essential demand (people always need housing regardless of economic cycles), highly diversified revenue across thousands of tenants, and favorable CMHC-insured financing offering long amortizations and preferred rates.
• Bond Portfolio Comparison: When evaluating cash distributions, major offerings remain highly competitive with fixed-income portfolios. Centurion REIT provides a cash yield of 4.16% for Class A. Meanwhile, Avenue Living Core Trust targets an implied distribution yield of ~5.00% on Class D. These regular cash flows match or exceed standard bond yields while retaining long-term equity growth potential.

The obvious near-term downside remains the lack of immediate liquidity; however, the clear upside is the potential for equity growth beyond the ongoing income once market conditions reset.

Looking Ahead: Developer Trends & Future Growth

A key factor to consider is builder behavior across the industry. Most developers prefer building into a rising market rather than a down market. As a result, many new construction projects are scheduled to commence in 2028, 2029, and 2030, anticipating a return to stronger real estate market fundamentals. As supply bottlenecks persist and market conditions improve, established portfolios like Centurion and Avenue Living remain well-positioned for meaningful future growth. Recent updates highlight that new construction starts remain constrained by elevated financing costs and high development expenses, which sets the stage for a tighter housing market and accelerating rental growth in the coming years. Furthermore, large established platforms continue to benefit from strong operational fundamentals, high stabilized occupancy, and strategic liquidity initiatives such as asset sales and international capital raising.

Take-Home Message & Recommendations

If you are an investor who currently holds illiquid shares in a private Canadian REIT, here are my core recommendations:

1. Hold fast and take a deep breath: Not all is lost; the underlying multi-residential real estate assets remain fundamentally sound and continue to produce essential rental income.
2. Stay informed: Keep closely updated on available liquidity options and structural changes as fund managers introduce new redemption channels.
3. Utilize existing income: Consider using ongoing cash distributions as a reliable income stream to help fund retirement living or to complement other investment opportunities.

As always, I am here to help you navigate your portfolio strategy.

Ian

Market Intelligence Sources & References

• Centurion Asset Management Monthly Updates: NAV, portfolio occupancy, and redemption metrics (including Aug 2026 data).
• Avenue Living Core Trust Financials: Q2 2026 financial statements and leadership disclosures.
• CMHC Rental Market & Housing Supply Data (2026): Reports on housing starts, supply bottlenecks, and affordability estimates.
• Bond Market Context: Historical Bank of Canada policy rate data as of Sept 2026 for fixed-income comparison.

Ian Ardill, B.A., M.T.S.
Wealth Advisor
CEO, Ardill Group

Direct: 1 905 769 2004
Office: 1 905 907 7000
ian@ardillgroup.com