Why investing in Canadian essentials never goes out of style

Canadian investors looking to diversify their portfolios, achieve greater tax efficiency, and build their wealth faster have lots of options. The constant buzz about the latest investment trends, however, can make it difficult to determine which investments are truly worth your attention.

Investment fads come and go—just look at the dot-com bubble in the late 1990s or the recent cryptocurrency craze. Like all trends, these are typically met with widespread enthusiasm and see rapid initial growth—but that momentum doesn’t tend to last. If you’re looking for investments that can provide steady and stable performance with long-term growth potential—and resilience in any economic climate—it may be time to tune out the trends and consider investing in Canadian essential assets.

Canadian essential assets: always relevant and in demand

Canadian essential assets are tangible resources that hold intrinsic value and support basic human needs—for example, places to live, do business, and shop. We also need places that support our homes and businesses, including distribution centres for storing and shipping essential goods.

This makes residential and commercial real estate catering to these purposes an essential asset—and real estate investment trusts (REITs) allow you to invest in this essential real estate without having to manage the properties yourself. REITs have been around in Canada since the 1990s, so they aren’t a flashy new investment, but they can offer a reliable way to grow your wealth over time.

Energy infrastructure is another essential; after all, we need energy to power our homes, businesses, and stores. Clean energy funds allow you to invest in professionally maintained renewable energy infrastructure as Canada shifts toward a clean energy economy.

Essential assets will always be relevant, regardless of the economy or the greater geopolitical climate, so adding them to a diversified investment portfolio may be a beneficial risk-management strategy.

How investing in essentials can help protect your portfolio

Canadian essential assets have built-in resilience that can help shield your investment portfolio from public stock market volatility and keep your wealth-building goals on track.

Some types of real estate and infrastructure will always be in demand—both in good times and bad. This includes multi-residential housing, industrial warehousing facilities, essentials-based retail, and clean energy infrastructure. During times of economic growth, these assets may enjoy increased value due to more activity in the real estate and infrastructure sectors. They have also proven resilient in the face of market turbulence and downturns.

Investing in essential assets—especially through private investments like real estate investment trusts (REITS)—can provide multiple financial benefits. Essentials-based private investments can help you diversify your portfolio, mitigate risk during market uncertainty and turbulence, and potentially grow your wealth faster. Private real estate and infrastructure investments may not feel as exciting as jumping on the latest stock trend, but when it comes to investing—especially for monthly income or long-term wealth building—boring can be a good thing.

Key Canadian essential asset types

Multi-residential housing

Multi-residential properties typically see consistent demand regardless of the economic environment, making them a historically resilient essential asset class. Rental housing is a critical need—not only in major Canadian cities, but also in secondary markets. Although Canada’s urban centres continue to grow, people are increasingly moving to smaller communities as well. According to OntarioHousingMarket.com, affordability, recreational opportunities, and a balanced lifestyle are some of the reasons people are exiting major cities and making the move to secondary markets.

Investing in a REIT enables you to access high-quality, professionally managed real estate without the hassle of being a landlord. There are both private and public REITs, but since private REITs aren’t listed on public exchanges, they’re far less subject to public market emotion and pricing volatility.

“Everyday essential” retail

Not all retail real estate is created equal: there are retail centres focused on discretionary items, like fashion, and then there are assets anchored by “everyday essential” goods and services.

Discretionary retail often struggles in tough economic times, but essentials-based retail assets have proven resilience. Their main tenants—grocery stores, pharmacies, quick-service restaurants, banks, and medical clinics, to name a few—are integral to Canadians’ day-to-day lives. Commercial brokers agreed in a RENX.ca article that real estate properties anchored by necessity-based tenants have demonstrated resilience through Canada’s post-pandemic economic challenges and will continue to be a sought-after investment.

Essential retail in Canada’s secondary markets may be an even more compelling investment option than similar properties in major cities. In these areas, a grocery- and pharmacy-anchored property may be the sole or primary shopping hub for the entire surrounding community. CBRE’s 2025 Real Estate Market Outlook predicts more retailers will tap into Canada’s secondary markets this year. As more people move to secondary markets, and demand for housing and essential services increases, so does the need for retail properties that cater to everyday essential shopping and services. By investing in Canadian properties anchored by tenants that provide essential goods and services, through products like private retail REITs, you can provide a stable foundation for your portfolio and potentially sidestep volatility.

Industrial warehousing, logistics, and distribution

Purpose-built warehousing, logistics, and distribution centres support essential sectors such as food supply and manufacturing. They address the growing demand for product storage and timely delivery, making them a key component to Canada’s infrastructure and economy. Like multi-residential housing and essentials-anchored retail, these assets may help provide long-term stability for your investment portfolio.

Well-positioned distribution centres help address Canada’s need for efficient supply chains. These properties are often located in key areas within major cities or along Canada’s major transportation corridors, ensuring that goods can be moved quickly and efficiently between these markets.

Warehousing facilities, especially those tenanted by brands providing essential goods, maintain their necessity in any economic climate. A private industrial REIT focused on buying and managing these types of facilities may help protect your investment portfolio.

Renewable energy investing: powering Canadian homes and businesses

Just as all Canadians need places to live, work, and shop, we also need the infrastructure that provides essential utilities for those locations.

Renewable energy infrastructure investments are becoming increasingly important as demand grows for reliable and sustainable energy sources to power our homes and businesses. According to the Canadian Climate Institute, Canada’s electricity demand is expected to grow up to 2.1 times larger by 2050, and our generation capacity will need to be up to 3.4 times bigger to meet that demand. Energy demand will further increase in tandem with the growth in other essential sectors like housing, retail, and distribution.

Investing in renewable infrastructure, especially through a private clean energy fund, may add an extra layer of protection to your investment portfolio. Renewable energy production is dependent on natural factors like sunshine (for solar assets) and waste production (for biogas)—factors that have little correlation to the greater geopolitical events that influence public market fund performance.

Private alternative investments in Canadian essential assets

Choosing Canadian essential asset investments, instead of building your portfolio based on what’s new and trendy, can be a smart choice to help protect and grow your wealth. By considering private alternative investments rooted in these essential asset classes, for example, through REITs or a clean energy fund, you can take an even bigger step toward portfolio stability. Skyline is a Canadian capital management company that offers private alternative investments in essential real estate and infrastructure. Through Skyline’s funds, you can invest in institutional-quality apartment, industrial, and retail real estate, as well as renewable energy infrastructure: all essential assets that cater to Canadians’ basic needs.

Skyline’s investment products focus on the essentials as part of their acquisition and management strategies and have a track record of resilience in economically uncertain times. The funds have a historical annualized return of 9-15% as at December 31, 2024.

Trends rise and fall, but focusing on proven and reliable investments can be a wise approach to growing your wealth.