CHICAGO, Feb. 18 /CNW/ - IPD today released the 2009 results for the ICREIM / IPD Canada Annual Property Index (http://www.ipd.com/OurProducts/Indices/Canada/tabid/430/Default.aspx), which at the end of December 2009 covered C$90.9 billion of directly-held commercial real estate. The Index recorded a total return for 2009 of -0.3%, down from 3.7% in 2008, and the first time since 1993 that the total return entered negative territory.(1)
Direct property investment underperformed the REIT market, which rebounded by 53.1% in 2009 according to the FTSE EPRA/NAREIT Index for Canada, as well as stocks which returned 33.6% according to the MSCI Canada Index, but nudged out bonds which returned -1.8%, as measured by the JP Morgan 7-10 Year Government Bond Index.
"The continued decline in property values was entirely responsible for the weaker total return recorded in 2009, with on average capital value write downs of 6.7%, following on the heels of average write-downs of 2.4% in 2008," said Doug Rowlands, Senior Manager at IPD.
Of the major sectors, Retails went from last place in 2008 to the top performing sector in 2009, with a total return of 3.5%, followed by Residential at 1.9%. Offices and Industrials both posted a negative total return, of -2.6% and -4.4% respectively.
Among the 6 largest commercial property markets, total returns were lower than a year earlier except for Montreal (which improved slightly to 1.3%). Calgary posted the poorest performance with a total return of -7.4%, while Ottawa took top spot (3%). Returns in the other 3 major markets were as follows: Vancouver (-0.2%); Toronto (0.2%); Edmonton (1.1%).
Notes to editors:
(1) Data prior to 2000 provided by Frank Russell Canada
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The ICREIM / IPD Canada Annual Property Index, one of the 23 component country indices of the IPD Global Property Index, measures the returns to directly held standing property investments from one open market valuation to the next. Additional indices are calculated covering the major sectors of the Canadian property market.
SOURCE INVESTMENT PROPERTY DATABANK (IPD)
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