Canada An Oasis of Stability

Transcription

1 Ottawa Real Estate Forum Market Outlook Presented by John O Bryan Vice Chairman 2011 CB Richard Ellis Limited, Real Estate Brokerage

2 Canada An Oasis of Stability Office 9.4% Industrial 5.3% CANADA Office 8.2% Industrial 7.5% Office 17.9% Industrial 11.1% Office 20.6% Industrial 12.0% Office 13.4% Industrial 13.7% USA Office 19.7% Industrial 14.9% Source: CBRE

3 It Is All About Jobs! 2,000 Aug Nov U.S. Job Losses (000s) -2,000-4,000-6,000 Aug Canada Job Losses (000s) -8, , US ( L ) Canada ( R ) Source: Statistics Canada and Bureau of Labor Statistics

4 Office Overview 2011 CB Richard Ellis Limited, Real Estate Brokerage

5 Improvement in U.S. Office Vacancy Lags Canada 24 Forecast Vacancy Rates (%) Canada US Source: CBRE-EA Office Outlook, Winter 2011

6 Canadian Office Markets Vacancy (y/y) Basis Points (bps) Source: CB Richard Ellis Limited

7 24% 22% 20% 18% 16% 14% 12% 10% National Office Sublease Market 1Q06 2Q06 3Q06 4Q06 2Q07 3Q07 4Q07 1Q08 1Q07 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Source: CB Richard Ellis Limited Sublet % of Vacant Space

8 Most Markets Below Historical Average Office Vacancy Vacancy Rates (%) Va ncouver Ca lga ry Edmonton Winnipeg Toronto Otta wa M ontrea l Ha lifa x 3Q2011 Historical Average Source: CBRE-EA Canada Office Outlook

9 Office Construction Activity 10 Office Spa ce Under Construction, SF (M illions) Va ncouver Ca lga ry Edmonton Toronto Otta wa M ontrea l Ha lifa x 2008 Peak 3Q 2011 Source: CB Richard Ellis Limited

10 Industrial Overview 2011 CB Richard Ellis Limited, Real Estate Brokerage

11 16% 14% 12% 10% 8% 6% Canada Outperforms! Forecast Availability Rate 4% 2% 0% Source: CBRE-EA Canada Industrial Outlook XL, Spring 2011 Canada US

12 Canadian Industrial Markets 400 Availability (y/y) 300 Basis Points (bps) Source: CB Richard Ellis Limited

13 Industrial Availability Rates Below Historical Average Availability Rates (%) Va ncouver Ca lga ry Edmonton Winnipeg Toronto O tta wa M ontrea l Ha lifa x 3Q2011 Historical Average Source: CBRE-EA Canadian Outlook

14 Industrial Construction Activity 8 Industria l Spa ce Under Construction, SF (M illions) Va ncouver Ca lga ry Edmonton Toronto Otta wa M ontrea l Ha lifa x 2008 Peak 3Q 2011 Source: CB Richard Ellis Limited

15 Inventory Creeping Up 1.7 Post 91 Inventory glut 2009 Inventory glut Inventory glut Ratio of Total Inventory to Sales, s.a. Source: Statistics Canada

16 Retail Overview 2011 CB Richard Ellis Limited, Real Estate Brokerage

17 Retail Stability in Canada, U.S. Continues to Struggle 14% 11% Forecast 8% 6% Estimated Vacancy Rate (%) 3% 0% Canada US Source: CBRE EA Retail Spring Outlook 2011 and CB Richard Ellis

18 Consumer Confidence Remains Fragile Jan- 02 May- 02 Sep- 02 Jan- 03 May- 03 Sep- 03 Jan- 04 May- 04 Sep- 04 Jan- 05 May- 05 Sep- 05 Jan- 06 May- 06 Sep- 06 Jan- 07 May- 07 Sep- 07 Jan- 08 May- 08 Sep- 08 Jan- 09 May- 09 Sep- 09 Jan- 10 May- 10 Sep- 10 Jan- 11 Canada U.S. Source: Conference Board of Canada, University of Michigan Consumer Sentiment

19 Canadian Retail Space Fundamentals 12,000 12% 10,000 8,000 6,000 4,000 2,000 10% 8% 6% 4% 2% Estimate Absorption SF (000s) Estimated Vacancy Rate Forecast 0 0% F Absorption New Supply Estimated Vacancy Rate Source: Canadian Shopping Centres Directory, CB Richard Ellis

20 Retail SF per Capita 16.1 SF 22.4 SF Source: CB Richard Ellis, ICSC, CSCA

21 Canada Who s on the Radar? Opened Done Deals Looking No Deals Yet

22 Small Format & E-Commerce and Mobile Usage Alphabet Commerce: E-commerce M-commerce (mobile) F-commerce (Facebook) S-commerce (social) V-commerce (video)

23 Multi-Residential Overview 2011 CB Richard Ellis Limited, Real Estate Brokerage

24 300, , , , ,000 International Immigration N et Interna tiona l Immigra nts Forecast 50, Source: Conference Board of Canada Vancouver Calgary Toronto Montreal N ational

25 Who Bought? Multi-Res All Asset Types Buyers YE 2010 MY 2011 YE 2010 MY 2011 Private/Syndicates 82.1% 58.8% 48.9% 43.8% Foreign 2.9% 6.9% 1.7% 2.8% Pension Fund 4.3% 0.0% 9.6% 10.0% Institutions 3.6% 0.0% 7.5% 4.2% REITs/REOCs 6.3% 34.3% 15.7% 37.7% Private Equity 0.8% 0.0% 16.7% 1.5% Source: CB Richard Ellis Limited/RealNet Canada

26 CMHC Financing is the Difference CMHC Mortgage Rates Commercial Mortgage Rates Loan-to-Value Ratios Up to 85% 65% -70% Amortization Up to 35 years years 5-Yr Interest Rate 2.31% 2.91% 3.2% - 3.7% 10-Yr Interest Rate 3.33% 3.93% 4.35% % Source: CB Richard Ellis, Bank of Canada, CMHC

27 Home Prices Exceed Income and Rent Trends Ownership vs. Rental Estimated Carrying Costs 2010* Average Home = $2,416/month Average Condo = $1,534/month Average 2-Bdrm Rent = $962/month 150 Index = Personal Disposable Income Per Capita National Avg. 2-Bdrm Monthly Rent National Avg. Home Price * Based on a 5 year fixed-rate mortgage, 25% down and 25 year amortization Sources: Conference Board of Canada, Statistics Canada, MLS, Royal LePage

28 $1,000 $800 $600 $400 $200 National Multi-Residential Average Monthly Rent Vacancy Rate (%) $ Mid Source: CB Richard Ellis, CMHC Average Rent Vacancy

29 Multi-Res Vacancy Mid-Year Vacancy (y/y) Vacancy Rate 6% 100 4% % 0% -2% -4% Basis Points (bps) % % Vancouver Calgary Edmonton Winnipeg London Wa terloo Toronto Ottawa Montreal Halifax Vacancy Rate Change Vacancy Rate Source: CB Richard Ellis and CMHC

30 Investment Overview 2011 CB Richard Ellis Limited, Real Estate Brokerage

31 Canadian Investment Volume $ billions Q1/ Q2 11 Source: CB Richard Ellis, RealNet Canada Investment Volume

32 Canadian Investment Transactions ($B) Property Type H11 Office $4.1 $5.4 $4.4 $10.3 $6.0 $2.5 $3.7 $2.4 Industrial $3.4 $4.1 $7.2 $5.8 $4.4 $2.7 $5.7 $2.0 Retail $4.0 $4.1 $4.0 $4.4 $3.2 $2.4 $3.7 $3.0 Multi-Res $2.9 $3.0 $3.5 $4.4 $3.2 $2.4 $2.9 $1.7 Land $2.5 $2.4 $3.9 $4.6 $4.0 $2.6 $2.7 $1.2 Hotel $0.3 $0.8 $1.3 $2.6 $0.3 $0.2 $0.2 $0.1 Total $17.3 $19.8 $24.2 $32.2 $21.1 $12.7 $18.9 $10.3 Source: CB Richard Ellis Limited/RealNet Canada

33 Who Bought in 2011 YTD? (Incl Hotel & ICI) Buyers Office Industrial Retail Multi- Res ICI- Land Hotel Total Private/Syndicates 24.8% 50.8% 36.6% 58.8% 95.3% 100.0% 43.8% Foreign 5.8% 1.7% 0.0% 6.9% 0.0% 0.0% 2.8% Pension Fund 3.2% 3.1% 25.4% 0.0% 0.0% 0.0% 10.0% Institutions 6.9% 9.5% 1.5% 0.0% 1.9% 0.0% 4.2% REITs/REOCs 56.5% 31.3% 36.6% 34.3% 1.6% 0.0% 37.7% Private Equity 2.9% 3.7% 0.0% 0.0% 1.2% 0.0% 1.5% Source: CB Richard Ellis Limited/RealNet Canada

34 Cap Rates Hit 2007 Levels Going Lower? 11% 10% 9% 8% 7% 6% 5% Q11 2Q11 Office - CBD A Industrial - A & B Retail - Neighbourhood Multi-Res - B Source: CB Richard Ellis

35 Capital Markets Set Record Pace REIT & REOC Issuance Over $5.8 billion raised in 2011 YTD $9, $7, $ in millions $6,000 $4, # of Deals $3, $1, $ Equity Debentures # Of Deals 0 Source: RBC Capital Markets, Canaccord Genuity Corp.

36 Thank you 2011 CB Richard Ellis Limited, Real Estate Brokerage