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Canadian Hotels Attract Foreign Investors

By on September 30, 2013

Foreign investors have been increasingly snapping up stakes in Canadian hotels, attracted in part by a relatively stable economy.

About 24 per cent of the $794 million that was invested in Canadian hotels during the first six months of this year was foreign money, compared to about 7 per cent of the 650 million worth of hotel deals done during the first half of 2012, according to real estate service firm CBRE.

“Historically Canadian investors bought Canadian hotels, by and large, and this is one of the first substantive breakout years,” said Bill Stone, an executive vice-president at CBRE who worked on the sale of an interest in Toronto’s King Edward Hotel to Texas-based Omni Hotels & Resorts. “We’ve seen a real spike, in the last eight to 12 weeks specifically, of activity”. A number of Canadian real estate investment trusts are selling hotel properties. 

Ivanhoé Cambridge, the real estate arm of the Caisse de Dépôt et Placements du Québec, is in the midst of selling off its hotel portfolio bit by bit, and will be accepting first-round bids for the Fairmont Chateau Laurier in Ottawa next month. (Outside Canada, Ivanhoé Cambridge is also currently selling the Fairmont Washington and a portfolio of 18 Intercontinental-related hotels in Europe.)

Ivanhoé Cambridge once owned as many as 60 hotels, but decided a couple of years ago that it would be rather stick to office, retail and residential real estate investments.



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