(This just came into my email box...)
Thank you to KPMG for the following:
November 27, 2006
The following information was obtained from newspaper articles appearing in the Globe and Mail and the National Post for the week ending November 26, 2006:
The Caisse de dépôt et placement du Quèbec’s office property subsidiary, SITQ, has
purchased a 50% interest in the 40-storey TD Canada Trust Tower and the twin-tower TD
Square building in Calgary from Alberta Investment Management for a price reportedly
between $350-million and $400-million.
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The Ontario Municipal Employees Retirement System’s property investments will return
more than 20% in 2006 after returning 26% in 2005.
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According to CB Richard Ellis Ltd., office occupancy costs in Calgary rose to US$53.51 a
square foot per year in the third quarter, compared with US$52.80 a square foot in Toronto.
In Edmonton, occupancy costs climbed to US$29.58 a square foot from US$17.45 a square
foot two quarters ago.
The most expensive district in the world is London’s West End, where occupancy costs are
US$212.03 per square foot, followed by Tokyo’s inner central district at $145.68 per square
foot. Midtown Manhattan is North America’s most expensive district at US$62.07 per square
foot.
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According to Cushman & Wakefield LePage, the national office vacancy rate is expected to
fall from 7.1% at the end of the third quarter to 6.9% by year end and further to 6.7% by the
end of the fourth quarter in 2007. The vacancy rate in Toronto is projected to drop to 7.2%
by the end of 2007 from 7.5% at the end of the third quarter and 7.3% at the end of this year.
Downtown Toronto is expected to add 3.2 million square feet of space. The vacancy rate in
Calgary is expected to go down to 0.4% in 2007 from 1.4% at the end of September. The
city has 10 projects planned that could add 10 million square feet of space. Winnipeg will
add 700,000 square feet of space and the vacancy rate will drop to 6.2% by the end of 2007
from 6.4% this year.
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According to CB Richard Ellis Ltd., the third-quarter industrial vacancy rate in Richmond,
British Columbia, is 1.1%, compared with 0.8% in Vancouver and Surrey. Richmond added
141,150 square feet of industrial space in the third quarter, while Langley added 277,998
square feet. For the 12 months ended October, industrial building permit values in eastern
Richmond reached $72.5-million, more than twice the value issued in west Richmond.
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According to Century 21 Real Estate Corp., the selling price of a typical bungalow has
risen 144% in Edmonton, 128% in Calgary and 129% in Vernon, British Columbia, over the
past five years. The price of a typical home in the Beaches neighbourhood in Toronto has
climbed 106%, while the price of a detached house in Ottawa is up 23%. Housing prices in
Canada are expected to climb between 7% and 9% in 2007, with increases of more than
10% in Alberta.
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According to the Canadian Real Estate Association, the average house price in Alberta
will go up 9.9% in 2007, while prices east of Manitoba will increase 4% or less.
© 2006 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
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According to Canada Mortgage and Housing Corp., the average house price in Alberta will
rise by about 30% in 2006 and 12.6% in 2007. The national average price is expected to
climb 5.7% next year, compared with 11.6% this year.
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According to Royal LePage Real Estate Services, sales of luxury homes jumped 160% in
Calgary, 153% in Halifax, 129% in Edmonton and 57% in greater Vancouver in the first three
quarters of 2006, compared with the same period in 2005. Sales of luxury homes increased
34% in Ottawa, 32% in Montreal, 27% in Victoria, 25% in Winnipeg, and 20% in greater
Toronto.
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According to the Canadian Institute of Mortgage Brokers and Lenders, more than 31% of
Canadian home buyers sought the advice of a mortgage broker in 2006, compared with 25%
in 2005.
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According to Statistics Canada, 1.7 million or 14% of Canadian households spent 30% or
more of their total budget on shelter costs in 2004. Some 12% spent between 30% and 50%
of their incomes on housing, while 2% spent 50% or more. Only 6% of those who owned
their own homes spent 30% or more of their budgets on shelter, compared with 31% of
renters.
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Blackstone Group LP will purchase Equity Office Properties Trust for US$20-billion, or
about US$48.50 per share. Including debt, the transaction is worth US$36-billion.
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According to Bloomberg, buyout firms more than doubled their acquisitions of property
companies to US$16.5-billion in 2006, before Blackstone Group LP’s acquisition of Equity
Office Properties Trust.
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According to Thomson Financial, the value of transactions in the U.S. real-estate sector
this year has risen nearly 50% to $264-billion from 2005.
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According to Private Equity Intelligence, 68% of investors in private equity funds plan to
add more money to real estate investments, while only 4% plan to reduce their allocation
toward property. In 2006, private equity funds with a focus on real estate are expected to
exceed the $45-billion in new capital raised in 2005.
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According to Colliers International, U.S. office vacancy rates fell in the third quarter to
12.96% from 14.13% in 2005. Rents for class A space in Manhattan climbed to a record
US$63.26 per square foot in October.
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According to Fidelity Investments, global REIT investment could rise to US$1-trillion by
2010 from less than US$50-billion 16 years ago.
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Cintra Concesiones de Infraestructuras de Transporte SA, which runs Toronto’s 407-
ETR highway, is studying about 50 toll road projects in Europe, Australia and the U.S.
involving a potential investment of more than €80-billion ($117.5-billion). The company is
targeting toll road projects in North America, where Georgia and Virginia are among five
U.S. states inviting bids, as well as Ireland and Portugal’s Azores Islands.
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Trump Entertainment Resorts Inc.’s US$1.25-billion of 8.5% notes due 2015 have
returned 5.2% in the past month. The bonds are rated Caa1 by Moody’s Investors Service
and B- by Standard & Poor’s. Trump Entertainment is competing against four gaming
companies for two licenses to build a new casino in Philadelphia. Trump is also reportedly
considering a plan to swap some of its holdings in Atlantic City with property in Las Vegas
owned by Steve Wynn, according to the Star-Ledger newspaper.
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Best Western International Inc. reportedly plans to triple the number of its four- and fivestar
Premier hotels in China to 60 by 2009, while abandoning its plans to build a network of
three-star, budget hotels in China by 2007.
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Wyndham Worldwide Corp.’s Super 8 chain reportedly plans to expand from 33 to 110
hotels in China over the next couple of years.
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According to the European Mortgage Federation, the volume of mortgage loans in the EU
climbed 11% in 2005 to €5.1-trillion ($7.5-trillion), above the 9.4% average of the past 10
years. Mortgage volumes soared 97% in Latvia, 94% in Lithuania and 80% in Estonia.
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