As the Canada Investment Summit enters its second day in Toronto, institutional investors have already promised hefty capital commitments which could have massive downstream benefits for commercial real estate.

The first-of-its kind gathering of leading global investors, Canadian CEOs and public sector representatives is focused on accelerating new investment into Canada.

Co-hosted by the federal government, CPP Investments and the Public Sector Pension Investment Board (PSP), the summit hopes to "enable more than $1 trillion in total investment from public, private, and institutional partners," the Prime Minister's Office said when the event was announced in April.

BlackRock chairman and CEO Larry Fink, Blackstone president and COO Jon Gray and Barclays CEO C.S. Venkatakrishnan are among the big names at the event, according to reports from the Globe and Mail and Bloomberg.

A prospectus highlighting 160 projects in various stages of development that are open for investment was distributed to the attendees and while CRE is not a direct focus, the industry is expected to benefit from the surge of capital into the country.

Capital commitments approaching $400 billion

While few hard details are yet to emerge from the closed door meetings, two major Canadian banks announced $250 billion in financial support to Canadian businesses yesterday.

• TD Bank announced a $150-billion, five-year commitment to drive new lending, underwriting, advisory and other financing activities and accelerate investment, growth and innovation across sectors critical to Canada's economic future.
• Scotiabank announced a capital commitment of over $100 billion to support Canadian companies and projects in key sectors that will drive forward Canada's economic growth agenda and the launch of a new economic platform, the Scotia Growth Institute.

These commitments follow announcements last week from RBC, BMO, CIBC, Sun Life, Ontario Teacher's Pension Plan, PSP and Power Sustainable, totalling almost $100 billion.

And this morning, CPP Investments and Brookfield announced the launch of a $50-billion Maple Fund – a joint cooperation framework to generate and execute up to $50 billion in equity of large-scale investments in critical infrastructure and strategic industries across Canada.

Open for investment

According to the Investment Summit prospectus, capital deployment is targeted across eight key sectors:

• clean and conventional energy;
• power and utilities;
• minerals and metals;
• digital technology and data infrastructure;
• advanced manufacturing; and
• transportation, marine and port infrastructure.

While not direct investment in real estate, the hope is that funding commitments will spur activity, bringing longer term downstream benefits.

Real estate analysts are optimistic but say the execution stage of major projects which move forward will be key and timelines could be long. 

“The Canada Investment Summit signals that the federal government's trade diversification strategy is moving from vision to execution," Avison Young principal and director, market intelligence, Canada, Marie-France Benoit told RENX. 

The full impact will take time to materialize, Benoit suggested, and regulatory and tax changes may be needed to overcome chronic  impediments to major development.

"Supply chains and trade corridors are evolving, creating opportunities across logistics, manufacturing, warehousing and development land as businesses adapt to a more diversified trading environment," she said.

"This shift is likely to drive industrial real estate transaction activity as companies reposition operations and investors pursue emerging opportunities. Benefits are also expected to extend to professional and business services."

Major projects and nation-building: Colliers

The summit comes on the heels of a new report from Colliers, Nation-Building in Canada: Real Estate Implications and Opportunities, which suggests the industrial sector could be the major beneficiary of nation-building projects like those highlighted in the summit prospectus.

However, report author and Colliers Canada head of research Adam Jacobs told RENX there could be spillover benefits across other CRE sectors such as office and retail.

"There's a lot that isn't nailed down there, but you know there's the idea of a . . . knock-on effect as you have these expansions, it cascades into legal consulting, engineering, finance, insurance-like all of these associated industries, and it's just sort of a tailwind," he said.

While there are few specifics at this stage, Jacobs said industrial space will likely see the biggest jump in demand from nation-building projects, which he believes the sector can absorb.

"(Industrial) rents are still a lot higher than they were five or 10 years ago, and . . . it's just simpler to develop industrial than office or highrise condo and some of these other things," Jacobs said. "So, I think . . . we're we're probably in a good situation there."

Industrial could also benefit from increased investment in defence, as Canada accelerated defence spending and announced in March it had achieved NATO’s two per cent of gross domestic product (GDP) defence expenditure target in the 2025-2026 fiscal year.

"Increasing defence spending, whether to mollify NATO partners and the U.S. government, or for other reasons, is likely to significantly impact the real estate landscape," Colliers said in the report.

"Discussions about the placement of the Defence, Security and Resilience Bank in a major Canadian market has significance for the office sector, while the expansion of domestic military manufacturing and the supply chain could drive new demand for warehousing and logistics."

CPP data points to strong global investor retention

Summit co-host CPP Investments published two reports last week examining how global institutional investors decide where to deploy capital and what makes markets investible.

The giant pension fund said Canada has the strongest investor retention profile among eight developed markets, with 94 per cent of global investors expecting to maintain or increase Canadian exposure over the next three years.

"Global capital is looking for opportunity, but opportunity alone does not make a market investible," Naomi Powell, director, Insights Institute, CPP Investments, said in a press release on the reports.

"Trust and predictable rules build confidence, but capital ultimately moves to opportunities with sufficient scale, profitable structures and a credible path to execution."

U.S. trade tensions offer opportunity

While Canada's economy has been plagued by low productivity and capital investment for years, the Colliers report suggests current trade tensions with the United States might be the catalyst needed to break that trend.

"(T)his whole situation with the U.S. and NAFTA and tariffs and Trump, in my mind, has sort of created some urgency on . . . major projects, infrastructure initiatives, transportation, energy infrastructure," Jacobs told RENX.

"Everyone has been talking about these things for you know, God knows how long – five, 10, 20 years . . . There's always kind of a reason not to do them. But I think we kind of have this unique moment . . . where it's like, if not now, when?"