Soneil Investments Bucks Fears of Inflation and Buys Properties in Greater Toronto Area

Aug 22,2022 4 Comments By The Lilly Commercial Team

Investment Company Targets ‘Large Pieces of Land in Great Locations,’ Founder Says

Present market conditions aren’t scaring Soneil Investments off from acquisitions as the Toronto-based company pulls the trigger on $86 million in deals the founder hopes will one day benefit his heirs.

Privately held Soneil Investments paid $46 million for a Mississauga industrial portfolio comprising five properties with almost 140,000 square feet of space on nine acres at Dixie Road and Eglinton Avenue, just west of Toronto. The portfolio includes 1331 Crestlawn Drive, 1330 Eglinton Ave. E, and 4700, 4800, 4900 Dixie Road.

“In a high inflation and rising interest rate market, strategically acquiring properties becomes even more difficult,” said Neil Jain, president and CEO of Soneil Investments, in a statement. “We saw immense potential in the opportunity to fill vacancies, raise below market rents, and most importantly, capitalize on the location with a better use in the long-term.”

Canada’s central bank surprised the market last month with a 100 basis point increase in its overnight lending rate. The Bank of Canada is poised to raise rates again at its Sept. 7 meeting, with commentators expecting anywhere from a 50- to 75-basis point increase.

“Markets and policymakers were clearly caught off guard by this year’s inflation spike,” said Avery Shenfield, chief economist with CIBC, in a note issued Monday.

“Our own forecast for Canadian real gross domestic product growth has inflation coming down, and staying down, only because growth slows to well below what used to be considered its noninflationary potential,” Shenfield said.

Soneil’s industrial asset purchase comes with Avison Young describing the Greater Toronto Area as a hotbed of activity with the availability rate down to 0.9% in the second quarter.

“The majority of investor demand for spaces 10,000 square feet and greater during the same time frame was driven by private investors (51%), followed by users (31%) and institutional investors (9%),” said the real estate company in a report.

Soneil Investments has also been embracing the office market in the GTA, having paid $40 million for a 150,000-square-foot multitenant office asset located on six acres at 2233 Argentia Road in Mississauga in May. The company has purchased more than $180 million of assets so far this year.

“Both Dixie-Eglinton and Argentia have the same qualities that drew us to them – large pieces of land in great locations,” said Sach Jain, founder and chairman of Soneil Group of Cos., in a statement. “When the time comes for development, hopefully, my grandchildren will say that we made the right calls.”

Source CoStar. Click here to read a full story

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