I would say that largely isn't true. Long term investors of a certain class are looking for steady risk adjusted returns to match their obligations. Heck, they'll even do things like buying, not the underlying assets, but the rights to operate water utilities and roads for a fixed period (which Canadian pension funds have done). Others are looking for assets in safe harbour countries, were lower returns are justified due to lower political risk, and transparent central bank policy. For international investors, building apartments in Canada can also be a currency hedge, and the largest investors try to diversify not just their assets, but their currency exposure as well. Want to play a bet that the $CDN will return to 85 cents or 95 cents? All of a sudden your 2% return a year appreciates. The property value also doesn't have to appreciate in Canadian real terms, just in relative terms compared to their home country.
The world is awash in money that is barely making returns and sitting in near zero or negative returns government bonds. Chasing risk adjusted returns doesn't have to have comparable returns to lets say, investing in going concern corporations. When you're investing $100 billion dollars, trying to chase high returns for your entire portfolio is a risky strategy. Just like as a person ages, you switch assets over to those to fund your goal (a certain income each year), big funds know what they will need to pay out, and it makes sense to hold assets which generate steady returns to fund that income, while the rest of the fund for future obligations chases higher returns to reduce contributions needed to fund those steady returns.
Investments in real estate by these large funds is also helped on the back end - if the building is well built your amortization rate can be tiny, and if you have a very long term view, super tiny. There are very few other businesses where your productive asset is worth even 70% of the investment value after 30 years. So if you've made a 2% return over 30 years as a payout, but at 30 years you get even only a inflation adjusted 70% for your building, all of a sudden a positive cashfloow of only 2% of your investment a year gives you a nice positive Net Present value with a discount rate of 1%. Even if the asset didn't earn any returns in the mean time, if you were to hold it for 30 years, even a 35% inflation adjusted appreciation at 30 years has a positive NPV.
For smaller investors, they can be searching for short term returns for sure. But for long term investors the numbers get wonky and hard to see why the investments would be made until you compare the investments to alternatives, which are worse.
