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January 26, 2006
Real Estate: The Great White North
The U.S. real estate market may be topping out, but there are still opportunities up yonder in Canada. At least that's what Nancy Holland, manager of the $75 million ABN AMRO Real Estate Fund, thinks.
Holland has stashed about 5.5% of the ABN AMRO Real Estate Fund in Canadian REITS. "The yields are about 200 basis points higher than the U.S., and the fundamentals are a little better," Holland says. "Canada hasn't gone through a big downslide yet." Her fund, which has delivered an annualized return of 18.2% in the past five years through Dec. 31, gets a coveted A-rating from BusinessWeek's Mutual Fund Scoreboard.
In a recent interview, Holland told me she's a fan of Boardwalk Equities, an apartment operator with a big presence in Calgary. "With the oil boom, the economy is much better, and we are seeing some nice pick ups in occupancies," she says.
Holland also likes Summit REIT. The company has changed focus, shifting from the office and retail sectors. Now it owns industrial properties.
With the travel sector experiencing a global rebound, Holland has bulked up on hotel owners and operators, including Orient Express, Sunstone and Starwood.
Back in the U.S., Holland thinks the good times for real estate aren't over yet, but that investors are in for a bumpy ride. "We’ll have more volatility in the marketplace as interest-rate fears cause spikes," says Holland.
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