Global capital is flowing back into real estate, and Canada is emerging as a top destination for investors seeking stability and yield in 2026. According to Colliers' 2026 Global Investor Outlook, institutional players who stepped back during recent market turbulence are returning, drawn by Canada's resilient fundamentals and persistent supply constraints.

"Lenders are still very much open for business for the right product, and fundraising on the equity side is improving but we're still below prior peaks," said Reid Taylor, Senior Vice President, Capital Markets, Colliers Canada. "Following a lull in transaction activity in 2025, a lot of dry powder has been sidelined but pressure to deploy remains, which bodes well for investment activity to improve next year."

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Investors Are Changing How They Deploy Capital

Nearly half of investors, 49%, now favor direct investments and separate accounts over traditional funds. Platform joint ventures and M&A are gaining traction, while private equity is increasingly targeting both property-owning entities and operating businesses.

There's also a notable disconnect between investor appetite and fund orientation. While 37% of investors prefer core and core-plus strategies, only 9% of real estate funds being raised target these areas.

"This imbalance is prompting investors to rethink how they engage with the market, choosing structures that offer faster execution, flexibility and scale," said Damian Harrington, Director, Head of Research, Global Capital Markets and EMEA at Colliers. "Platform deals give investors a seat at the table and greater control. It's a tactical shift that reflects a more engaged, operational approach to capital deployment."

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Canada's Supply Constraints Are an Advantage

Canada's appeal to global investors is underpinned by strong demographics and a supply environment tighter than most global peers.

"It's not easy to develop here, which means we're much less overbuilt in basically every asset class," said Adam Jacobs, Head of Research, Colliers Canada. "The limited development outlook supports the argument for investing in Canada, because in many areas there's a fairly clean slate without competition."

That's a counterintuitive selling point. Canada's regulatory hurdles, high construction costs, long approval timelines, and restrictive planning processes make development difficult. But those same barriers create scarcity value for existing assets.

When new supply can't come online quickly, existing properties become more defensible. Investors betting on Canadian real estate are betting that supply constraints will keep valuations supported even as economic uncertainty persists.

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Multifamily Investment Volumes Rose Over 20% in 2025

Multifamily investment volumes in Canada rose over 20% in 2025, with expectations for another active year as rental demand stays strong in cities like Toronto, Calgary, and Ottawa.

Even with tighter immigration controls, Canada continues to experience population growth well above most advanced economies. Persistent housing undersupply, especially in major metropolitan areas, keeps multifamily demand elevated.

The rental market vacancy rate climbed to 4.3% in Q3 2025, the highest in five years. But that's still below the balanced market threshold of 5%. And with housing starts falling 17% in October to just 232,765 units annually, new rental supply isn't coming online fast enough to meaningfully ease demand.

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Retail Remains a Core Focus

Retail, particularly grocery-anchored and necessity-based centres, remains a core focus for institutional investors due to consistent income profiles and scarce new construction.

E-commerce disrupted retail, but necessity-based retail, grocery stores, pharmacies, dollar stores, has proven resilient. These properties generate stable cash flow, maintain high occupancy rates, and benefit from limited new supply as developers focus capital elsewhere.

For investors seeking predictable returns in an uncertain economic environment, grocery-anchored retail checks the boxes. It's defensive, income-producing, and insulated from many of the risks affecting other property types.

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Industrial and Logistics Continue Performing

Industrial and logistics assets continue to perform well, especially in urban infill and small- to mid-bay facilities.

The pandemic accelerated e-commerce adoption and reshaped supply chain strategies. Companies want distribution facilities closer to end consumers to enable faster delivery. That's driving demand for urban infill industrial space, which is scarce and difficult to develop due to land costs and zoning constraints.

Small- to mid-bay facilities, typically 10,000 to 50,000 square feet, serve last-mile logistics, local distribution, and light manufacturing. These properties offer higher yields than large warehouses while maintaining strong tenant demand.

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Canadian Institutions Are Reactivating

Institutional capital is showing signs of reactivation, especially among Canadian pension funds and major landlords. Many are shifting from development-heavy strategies toward stabilized, income-producing assets and platform-level partnerships.

That's a meaningful shift. Canadian pension funds have been among the world's most sophisticated real estate investors, with global portfolios spanning multiple asset classes. Their renewed focus on domestic opportunities signals confidence in Canada's fundamentals.

Public-to-private opportunities are also expanding. Several Canadian REITs are trading below net asset value, making them attractive targets for strategic buyers exploring privatizations and joint ventures.

When REITs trade below NAV, it's cheaper to buy existing portfolios than to develop or acquire properties individually. That creates arbitrage opportunities for investors with capital and patience.

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The Economic Context Can't Be Ignored

Prime Minister Mark Carney cautioned that the Canadian economy could shrink by nearly 2% in the coming years if growth fails to keep pace, largely due to the ongoing impact and uncertainty of United States tariffs.

That's not a minor risk. Canada's economy is deeply integrated with the U.S. Tariffs disrupt supply chains, reduce export competitiveness, and create uncertainty that dampens business investment. If trade tensions escalate, Canada's economic outlook could deteriorate quickly.

But even with that risk, Canada's real estate fundamentals remain supportive. Population growth continues to outpace most advanced economies. Persistent housing undersupply keeps multifamily demand elevated. And supply constraints limit the downside risk from overbuilding that affects other markets.

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Global Capital Flows Are Shifting

North America accounted for 40% of global fundraising in 2025 year-to-date, down from 50% in 2024. Meanwhile, Europe surged 50% and Asia Pacific jumped 130% year-on-year, reflecting growing interest in markets like Japan, Australia, and India.

Multi-regional strategies now account for nearly 30% of global fundraising, underscoring the push for diversification. Investors aren't putting all their eggs in one geographic basket anymore. They're spreading risk across regions and property types.

Within that global reallocation, Canada is holding its own. The country's share of North American investment activity is stable or growing, even as the overall North American share of global capital declines.

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Data Centres Are Booming

Data centres made up 31% of global real estate funds raised in Q1 through Q3 2025, displacing industrial as the hot sector. Artificial intelligence, cloud computing, and digital transformation are driving explosive demand for data centre capacity.

Canada has advantages in this space. Abundant renewable energy, particularly hydroelectric power in Quebec and British Columbia. Cold climate that reduces cooling costs. Political stability and strong data privacy regulations that attract enterprise customers.

Data centre development is capital-intensive and requires specialized expertise, but returns can be substantial for investors who can execute.

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Offices Are Staging a Comeback

Offices are also gaining investor interest after years of pessimism. The work-from-home trend that dominated pandemic-era discussions is moderating. Companies are bringing employees back to offices, at least part-time, and demand for high-quality office space in prime locations is stabilizing.

Flight to quality is the defining trend. Class A office space in downtown cores is holding value. Class B and C buildings in suburban locations are struggling. The divergence creates opportunities for investors who can reposition assets or buy quality buildings at discounts.

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How Coldwell Banker Horizon Realty Can Help

At Coldwell Banker Horizon Realty, we understand that global capital flows affect local real estate markets in complex ways. Whether you're a homeowner wondering how institutional investment will affect your neighborhood, an investor evaluating opportunities in multifamily or retail properties, or a buyer trying to understand market dynamics, we provide the expertise and local knowledge you need.

Understanding how institutional investors view the market helps you make better decisions about buying, selling, or holding real estate in your area.

Contact Coldwell Banker Horizon Realty today to discuss how global investment trends are affecting your local market and how we can help you navigate opportunities and risks in this evolving environment.

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The Bottom Line

Global investors are betting on Canadian real estate in 2026 despite economic uncertainty. Colliers' outlook shows institutional capital returning, drawn by supply constraints, demographic fundamentals, and relative stability compared to other markets.

Multifamily investment volumes rose over 20% in 2025. Retail, especially grocery-anchored centers, remains a core focus. Industrial and logistics continue performing well. And Canadian pension funds are reactivating after sitting on the sidelines.

Nearly half of investors are shifting to direct investments and platform deals rather than traditional funds. They want more control, faster execution, and flexibility to capitalize on opportunities as they emerge.

Canada's supply constraints, usually viewed as a problem for housing affordability, are an advantage for investors. It's hard to develop here, which means less competition from new supply and more defensibility for existing assets.

The economic risks are real. Tariffs could shrink GDP by 2%. Trade uncertainty dampens business investment. Labour markets show weakness. But even with those headwinds, Canada's real estate fundamentals, persistent undersupply, strong demographics, stable institutions, make it attractive to global capital seeking stability and yield.

The year ahead is expected to reward investors who can combine speed with strategy. As financing conditions improve and interest rates normalize, both domestic and international investors are preparing to re-enter the market in a more meaningful way.

For Canadian real estate markets, that means more competition for assets, better pricing for sellers, and continued support for valuations even as economic uncertainty persists. Global capital is on the move, and Canada is one of the places it's moving toward.