2 resilient real estate stocks to buy in a turbulent market

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The Canadian housing market as a whole is falling quite rapidly. Home prices and the number of sales are falling at a rapid pace, especially in markets like Toronto. However, its impact is not yet visible in the TSX real estate sector, which is currently influenced more by the stock market rally than by the housing market decline.

The TSX Capped Real Estate Index is up 10% from its low point in 2022, which is higher than the TSX index’s 7% recovery over the same period.

However, when the momentum created by a bull market fades, residential real estate values ​​can feel the brunt of a declining market segment. Certain commercial real estate stocks and companies with diversified international exposure may prove more resilient in such an environment.

A storage space company

StorageVault Canada (TSX:SVI) focuses on a specific segment of the commercial real estate market, namely warehouse space. This has been the company’s goal since its inception, and it hasn’t changed yet. Instead of focusing on other commercial real estate assets, the company has strived for a leadership position in this niche segment. Its current portfolio includes 203 locations with over 100,594 storage units.

Eight of the seven brands under the StorageVault Canada banner are dedicated to flexible storage solutions or fixed storage spaces. The remaining company operates in the information management service space, which includes physical data/file storage.

The stock has fantastic growth potential. Its price has increased by about 185% in the last five years. And while he’s a dividend aristocrat, growth is his biggest draw, as the yield is usually relatively low (currently at 0.17%).

As a commercial real estate company with a leading position in a niche, StorageVault Canada seems resilient enough to handle the turbulent real estate market in Canada, which is precarious mainly due to the residential segment.

A commercial real estate services company

International Group Necklaces (TSX:CIGI)(NASDAQ:CIGI) is another commercial real estate stock that could be a solid choice in today’s real estate market. The company offers its clients a wide range of services and has a decent international presence. It started in Australia, but later moved its headquarters to Toronto. It operates in 63 countries, but most of its business is in the United States

This makes it even safer than a commercial real estate company that operates primarily in Canada, as it adds a geographic barrier to the market segment barrier against the real estate crash.

Colliers is also a decent growth stock and has returned around 148% to its investors over the past five years on price appreciation alone. It pays dividends, but the yield is usually relatively low.

Insane takeaways

If you are interested in property investment right now just because of the sector rally, and you plan to ride that wave as long as the market remains bullish, you can feel a much wider range of real estate stocks.

But if you’re looking for stocks that may have the best chance of surviving the potential downfall in the real estate sector if the real estate crash blows out of proportion, both companies are solid picks.

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