TPG Inc. in Discussions to Acquire Canadian Apartment Properties REIT's Manufactured Housing Busi

TPG Inc., a major US investor, is in talks to purchase CAPREIT's manufactured housing business, aiming to tap into Canada's competitive real estate market.

Alternative asset manager TPG Inc. is currently in discussions to acquire the manufactured housing business of Canadian Apartment Properties REIT, a strategic move by a major US investor to tap into the tight real estate market in Canada. The deal is reportedly valued at over C$700 million ($519 million), according to a source familiar with the matter. While the negotiations are exclusive, a final agreement is not imminent and any potential deal may not be announced for several weeks.

TPG Inc. in Discussions to Acquire Canadian Apartment Properties REIT's Manufactured Housing Business

Canada is facing a severe housing shortage due to years of underbuilding and a recent influx of immigrants, leading to increased demand for rental properties and soaring rents. This has prompted large investors to explore opportunities in the Canadian real estate market, with pension funds financing more apartment construction and companies like Blackstone Inc. expanding their presence in the country.

Manufactured housing, which offers a mix of rental and ownership options, has become an attractive alternative for Canadians struggling with affordability. Similar to trailer parks, residents lease the land while owning the prefabricated house situated on it. Canadian Apartment Properties REIT currently owns 12,134 manufactured homes across multiple sites in Canada, accounting for approximately 20% of its housing units in the country. The company has been focusing on upgrading its portfolio by selling older assets and acquiring newer properties with potential for higher rental income, as well as developing new buildings.

TPG's potential acquisition of Canadian Apartment Properties REIT's manufactured housing business reflects the growing interest of US investors in the Canadian real estate market amid ongoing housing challenges. The deal, if finalized, could provide TPG with a foothold in Canada's housing sector and offer Canadians more housing options in a competitive market.