Manulife Investment Management said it is paying $105 million to buy two new 16-storey multifamily buildings in Montreal.
The global wealth and asset management arm of Manulife Financial Corp., which has a portfolio of about 58 million square feet of property, said the purchase is for phases three and four of what is known as EQ8 LaSalle.
The 300 rental units at 7051 Rue Allard, about 12 kilometres from downtown, are aimed at young professionals with a mix of 32% one-bedroom units, 48% two-bedroom units and 20% three-bedroom units. Suites range from 500 square feet to 1,350 square feet.
"The city of Montreal's economic story is positive," Michael McNamara, head of real estate investments with Manulife, said in a statement. "Infrastructure investments, a tightening labour market and government support for technology have all contributed to economic advancement, and ultimately, a market we're looking to expand in."
Canada Mortgage and Housing Corp., the Crown corporation that advises the federal government on housing policy, said the overall vacancy rate in Montreal was 3.9% in 2019 but said in newer condominium units it is 0.2%, making it among the lowest in the country for that segment.
CMHC sees a long-term trend in Quebec's largest city that favours the rental market.
"Demand should accelerate over the coming years and will be driven, in part, by older households," said CMHC in a recent report. "If this acceleration in demand for rental housing does indeed become a reality and remain high in the coming years, it should contribute to the absorption of the large number of new rental units currently under construction."
Manulife has a portfolio of about 5.8 million square feet in Quebec. More than 500,000 square feet of that is in the multifamily sector.
EQ8, which includes two condo towers, was completed in this month, and Manulife said the buildings being purchased are fully leased.
The property is located in the southwest portion of Montreal in the borough of LaSalle, which is equidistant from downtown and Trudeau International Airport.