(Bloomberg) -- Alternative asset manager TPG Inc. is in talks to buy the manufactured housing business of Canadian Apartment Properties REIT, a move by a major US investor to gain exposure to the historically tight real estate market of its northern neighbor.

TPG is in exclusive discussions to acquire the business for more than C$700 million ($519 million), according to a person familiar with the matter who asked not to be identified because the talks are private. A transaction is not imminent and if a deal is reached, it may not be announced for several weeks, the person said. 

A TPG spokeswoman declined to comment, and a representative for Canadian Apartment Properties did not immediately respond to requests for comment. 

Canada is dealing with an acute shortage of housing after years of underbuilding and a recent surge in immigration, which has left more people locked out of the ownership market and caused rents to spike. That has left large investors looking for ways to get into the market, with pension funds financing more apartment construction and Blackstone Inc. recently striking a deal to buy Tricon Residential Inc., which owns and develops residential properties in Toronto, in addition to the US housing communities that constitute the bulk of its portfolio. 

With ownership affordability at record lows, manufactured housing is emerging as an attractive hybrid between rental and ownership for Canadians. A little like trailer parks, the resident leases the land but owns the pre-fabricated house which sits on it. CAP REIT had 12,134 manufactured homes in Canada across dozens of sites as of the end of 2023, according to a document the company filed with regulators in February. 

That’s about 20% of the real estate company’s housing units in Canada. CAP REIT’s business is concentrated in apartment buildings, and lately it has been selling off older assets to buy newer ones that may be able to command higher rents, as well as developing new buildings itself.

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