TORONTO, Feb. 17 /CNW/ - Investment in Canadian commercial real estate
bounced back last year with the strongest performance in three years,
at 11.1%, as measured by the rebranded REALpac / IPD Canada Annual Property Index.
The annual total return - a marked turnaround from 2009's negative
return, at -0.3%, and 3.7% in 2008 - is underpinned by a 4.0% capital
growth and a 6.5% income return.
The REALpac / IPD Canada Annual Property Index measured C$97 billion of
directly-held commercial real estate as at the end of 2010.
"A rebound in property values was entirely responsible for boosting the
total return back into double-digit territory in 2010," said Simon Fairchild, Managing Director of IPD North America. "The return to capital growth last year follows two consecutive years
of write-downs worth 9.3% at the all property level."
Stronger returns were posted in all of the four major sectors. For the
second year in a row, Retails were the top performing sector with a
total return of 15.6% in 2010, followed by Industrials at 8.8%, Offices
at 8.5% and Residential at 7.6%.
Montreal led the six largest commercial property markets, with a total
return of 14.2%; Edmonton trailed in last with 6.5%, the only market
among the 6 where capital values did not show any recovery. Returns in
the other 4 major markets were as follows: Vancouver (13.7%); Toronto
(10.9%); Ottawa (10.6%); Calgary (8.7%).
Comparisons with other Asset Classes
Direct property investment underperformed the REIT market, which
rebounded by 27.1% in 2010 according to the FTSE EPRA/NAREIT Index for
Canada, as well as stocks which returned 14.9% according to the MSCI
Canada Index, but outperformed bonds which returned 7.6%, as measured
by the JP Morgan 7-10 Year Government Bond Index.
REALpac & IPD Partnership
On December 31, 2010, REALpac assumed the functions of the Institute of
Canadian Real Estate Investment Managers ("ICREIM"), an organization
originally formed to manage the Frank Russell Index for Canada and
subsequently, the ICREIM / IPD Canada Property Index.
A new REALpac / IPD Canada Property Index Committee has been formed of
former ICREIM members within REALpac. "REALpac looks forward to
working with ICREIM's former members to enhance the Canada Property
Index," said Michael Brooks, CEO, REALpac.
In turn, REALpac and IPD signed an agreement on January 27, 2011, to
work together and to rebrand the Canada Index as the REALpac / IPD
Canada Property Index.
"We are looking forward to developing a strong working relationship with
IPD", said Brooks. "Service levels will be maintained and enhanced
within REALpac, and the new committee within REALpac will be focused on
both expanding the number of participants in the IPD data set and
improving the value reporting standards for the Index," he added.
Brooks also thanked Graham Senst, the former President of ICREIM, for
his years of service and dedication to ICREIM.
"Graham was instrumental in growing the depth and breadth of the index,
and we are honoured to carry on his work" said Brooks.
Notes to editors:
IPD is a global information business, dedicated to the objective
measurement of commercial real estate performance. As the world's
number one provider of real estate performance analysis for funds,
investors, managers and occupiers, IPD offers a full range of services
including research, reporting, benchmarking, conferences and indices.
IPD operates in more than 20 countries including most of Europe, the US,
Canada, South Africa, Australia, New Zealand and Japan. IPD's indices
are the basis for the developing commercial property derivatives
market, and the most authoritative measures of real estate returns
worldwide. For further information visit www.ipd.com and for IPD's News Centre visit www.ipd.com/news
REALpac is Canada's premier industry association for investment real
property leaders. Our mission is to collectively influence public
policy, to educate government and the public, and to ensure stable and
beneficial real estate capital and property markets in Canada. REALpac
Members currently own real estate assets located in the major centres
across Canada. Members include real estate investment trusts, publicly
traded and large private companies, banks, brokerages, crown
corporations, investment dealers, life companies, lenders, and pension
funds. Visit us at www.realpac.ca.
SOURCE Real Property Association of Canada
For further information:
Simon Fairchild, Managing Director at IPD North America at IPD,
+1 (312) 646-6241, firstname.lastname@example.org
James Wallace, Global Press Officer,
+44 (0)20 7336 4778, email@example.com
Michael Brooks, Chief Executive Officer at REALpac
+1 (416) 642 - 2700 ext. 225, firstname.lastname@example.org