Centurion and Nicola Wealth Restrict Redemptions and Cut Payouts on Real Estate Funds

As redemption pressures mount and liquidity tightens, Centurion Asset Management Inc. and Nicola Wealth Management Ltd. have become the latest Canadian firms to modify their real estate investment funds — joining a growing list of asset managers taking defensive measures.

Last Thursday, Centurion announced a temporary “managed redemption program” for its Centurion Apartment Real Estate Investment Trust (REIT) — the first time in its history that investor withdrawals will be limited. Monthly distributions, however, will continue.

The company said the decision was made “in response to current market conditions” and reflects its commitment to protecting the REIT’s long-term stability and performance. The board will review the program monthly.

“The past 18 months have posed challenges across the alternative investment industry,” Centurion noted, “as redemption requests and tighter capital flows have affected many market participants.”

Several alternative asset firms have already suspended redemptions, the notice said, resulting in Centurion’s REIT becoming “a source of liquidity” for some investors at a rate three to four times the usual level.

Meanwhile, according to The Globe and Mail, Nicola Wealth told investors it would reduce monthly distributions on both the Nicola Canadian Real Estate Limited Partnership and the Nicola U.S. Real Estate Limited Partnership, and that redemptions may be delayed.

CEO John Nicola said too many investors were attempting to withdraw at once — though total redemption requests represented less than 5% of fund assets.

In a blog post the same week, Nicola wrote that while the last three years have been “difficult for investors seeking positive returns in commercial real estate,” he believes it’s a poor time to sell.

“Investors should stay patient and wait for stronger real estate markets before reassessing potential sales,” he wrote. “There’s still a strong case for optimism.”

Fund Performance Overview

In its Q2 2025 report, the Nicola Canadian Real Estate LP reported year-to-date returns of 0.9%, one-year returns of 1.5%, three-year returns of 2.4%, five-year returns of 7.4%, and ten-year returns of 8.1%, averaging 8.8% since inception.
The fund’s portfolio is heavily weighted toward industrial properties (43%), followed by multi-family housing, self-storage, development, and office assets.

The Nicola U.S. Real Estate LP, on the other hand, posted a 2% loss year-to-date and 1.3% loss over the past year, but gained 2.2% over three years, 6.8% over five years, and 9.2% over ten years, averaging 9.7% since inception.

A Broader Trend

These moves follow similar actions by Trez Capital Mortgage Investment Corp., which recently suspended redemptions for five funds due to elevated cash-out requests.

Dan Hallett, vice-president of research at HighView Financial Group, said several factors are behind the trend. Some funds are facing operational headwinds, while others are simply experiencing herd-driven withdrawals.

“When one fund introduces redemption limits, the headlines alone can fuel investor anxiety,” Hallett said. “That fear spreads quickly, prompting others to sell before potential restrictions.”

Hallett emphasized that private real estate and alternative investment funds require deeper due diligence.
“Investors — or their advisors — must understand how valuations are determined, who the independent parties are, and what methods are used,” he said.

He compared the current situation to bank withdrawals, noting that even the largest banks would face liquidity issues if everyone demanded their cash simultaneously.

“No bank, not even the Royal Bank, could remain liquid if everyone showed up asking for their money,” Hallett said.