Resilient demand for real estate investment trusts (REITs) helped the Canadian market for initial public offerings (IPOs) shift gears in the second quarter, according to the latest PwC IPO market survey.

Real estate was the most active sector in the second quarter of 2013, helping to push total proceeds from all Canadian exchanges to a value of $870 million from 13 new issues. Six IPOs on the TSX contributed $856 million to the total for the quarter.

Four new issues of REITs represented $293 million of activity in the three-month period ending June 30, 2013, the PwC survey revealed.

The relative strength of the real estate sector comes as no surprise to Dean Braunsteiner, PwC national IPO services leader. “Real estate is an area of stability and growth, something rare in a volatile market,” says Braunsteiner. “With more REITs in the pipeline, including a substantial issue coming from Loblaws, the real estate sector has largely steered around the market volatility of the last few weeks.”

The largest new issue on the TSX in the second quarter came from BRP Inc., a company spun out of Bombardier that manufactures snowmobiles and personal watercraft, which raised $262 million. The second largest IPO of the quarter was the $250 million issue of new equity by Oryx Petroleum Corporation Limited – the only activity in the oil and gas sector.

“The success of the BRP and Oryx Petroleum issues send reassuring signals about the potential for the IPO market in Canada — if we can get through the current period of instability,” Braunsteiner adds. “The fact that Oryx, an exploration company with properties in Africa and the Middle East, chose the TSX for its IPO says companies in the extractive sector still look to Canada for our understanding of those industries.”

Mining IPOs, however, continue to lag behind the usual pace of activity in that sector, Braunsteiner notes. “Mining is still in a slump,” he says, “with depressed commodity prices weighing down any prospects for a turnaround.” While financing alternatives may exist for miners in early stage production, true juniors in the exploration business have few options. “We may be looking at a period of consolidation for juniors,” says Braunsteiner.

Second quarter activity helped raise the total proceeds from all Canadian exchanges to $1.3 billion for the first half of 2013, far ahead of the $220 million total for the first six months of 2012. There were 17 IPOs on all Canadian exchanges in the first half of 2013 vs 32 new issues during the same period of 2012.