STUART BARRON
National Director ResearchNational Director Research
Canada stands strong
Canada stands strong
Key national observations
T ’ l i d ffi h d i h hToronto’s explosive downtown office growth made it t...
Canada’s stellar performance
Well-positioned for expansion
New Supply
(millions of sf)
Vacancy
Rate
Vacancy rate vs. new s...
Check out Canada
Low vacancy: Our springboard to growth
Vacancy
Rate
Q3 2011 central area vacancy
10 largest US markets, 5...
Our suburbs: surprising comparison
Low supply in Canada sets the stage for faster recovery
30%
Vacancy
Rate
Q3 2011 Suburb...
Outperforming expectations
Vancouver, Calgary, Montreal
Good-bye ocean views
Vancouver’s premium space all but gone
Vacancy
(000 f)
Vancouver downtown vacancy vs. average absorpt...
Boom times again
Calgary soaks up office space
(000s sf)
Vacancy
Rate
Calgary downtown vacancy vs. rolling average absorpt...
Strong rebound
Montreal central area gathers steam
(000s sf)
Vacancy
Rate
Montreal central area vacancy vs. rolling averag...
GTA suburban growthGTA suburban growth
Aerocentre
BMO Meadowvale building
Hazel
General Mississaugag
1919 Minnesota court
Recovery takes hold
Suburban demand gains traction
Rolling absorption vs. vacancy (all classes)
25.0%1000
(000s sf)
Vacanc...
Positioned for growth
Low supply supports recovery
GTA West new supply vs. Q4 vacancy class A
160000.0%
180000.0%
200000.0...
Moving in the right direction
Absorption pushes towards expansionary demand
GTAWest average absorption (all classes) 2008 ...
Recessionary impact
Different experiences for GTA West submarkets
(000s sf)
GTA West - total absorption (class A)
400
600
...
Slow but sure
GTA suburban markets recovery rates
16%
Vacancy
Rate
Vacancy all classes
14.5%
12.0%
10.7%10.6%
10.3%10 0%
1...
Suburban demand drivers
Key observations
Demand will likely slow by mid-2012 and pick up again in 2013Demand will likely s...
And now for DowntownAnd, now for Downtown
Toronto
Who would’ve guessed?
Demand reached record highs through the Great Recession
Downtown vacancy vs. average absorption (all...
Ignited demand
Telling the tale of new supply success
Cumulative absorption – downtown premium space
(000s sf)
2,000
3,000...
Staggering success of new buildings
Corus
Bay Adelaide
1,027,937
occupied
RBC Centre
1,223,479
occupied
Corus
Building
482...
Sectors leading expansion
DowntownToronto Q4 2009 – Q4 2011
Banks
40 4%
Information &
Communications
5.1%
Real Estate
0.9%...
Looking for ardLooking forward
•The shape of demand 2013 to 2015The shape of demand 2013 to 2015
Factors strengthening downtown demand
Toronto increasingly seen as a prime location for global business
Educated multicult...
Factors weakening downtown demand
Uncertainty about impact of global economic upheaval on short- term
business confidence
...
DowntownToronto vacancy projections
Premium space (includes large blocks returning to market)
Vacancy
Rate
(000s sf)
10 5%...
C&W 2012 Market Survey Presentation
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C&W 2012 Market Survey Presentation

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Check out our presentation from recent market survey breakfast. Lots of interesting projections for 2012!

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Transcript of "C&W 2012 Market Survey Presentation"

  1. 1. STUART BARRON National Director ResearchNational Director Research
  2. 2. Canada stands strong
  3. 3. Canada stands strong Key national observations T ’ l i d ffi h d i h hToronto’s explosive downtown office growth made it the hottest market in North America Canada is at a remarkable launching point, looking to ang p , g expansionary cycle from 2013 to 2015 Both global and domestic factors are driving demand – key to sustained growthsustained growth Suburban market rebound remains fragile – may find a “new normal” in the years to come Record level of new building announcements inVancouver, Calgary, Montreal andToronto
  4. 4. Canada’s stellar performance Well-positioned for expansion New Supply (millions of sf) Vacancy Rate Vacancy rate vs. new supply (all classes) 17.3% 16 18 20 16% 18% 20% 8.2% 6 6% 11.5% 8.8% 10 12 14 10% 12% 14% 6.6% 6.1% 7.5% 4 6 8 4% 6% 8% 0 2 0% 2% 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 3Q 11 New Supply Overall Vacancy RateNew Supply Overall Vacancy Rate Updated Q3 2011
  5. 5. Check out Canada Low vacancy: Our springboard to growth Vacancy Rate Q3 2011 central area vacancy 10 largest US markets, 5 largest Canadian markets (all classes) 28.9% 25% 30% 35% Rate 11.6% 12.0% 13.8% 14.4% 16.8% 18.3% 15% 20% 25% 3.7% 5.1% 5.1% 6.4% 6.5% 9.9% 10.0% 10.2% 11.6% 0% 5% 10% 0% Updated Q3 2011
  6. 6. Our suburbs: surprising comparison Low supply in Canada sets the stage for faster recovery 30% Vacancy Rate Q3 2011 Suburban area vacancy 10 largest US markets, 5 largest Canadian markets (all classes) 20.4% 20.6% 21.9% 22.4% 25.3% 25% 30% 9 8% 12.1% 13.4% 15.3% 15.6% 16.1% 17.0% 17.8% 15% 20% 8.2% 8.7% 9.8% 5% 10% 0% Updated Q3 2011
  7. 7. Outperforming expectations Vancouver, Calgary, Montreal
  8. 8. Good-bye ocean views Vancouver’s premium space all but gone Vacancy (000 f) Vancouver downtown vacancy vs. average absorption (all classes) 12.7% 9.0% 12.0% 15.0% 150 200 250 Rate(000s sf) 5.9% 2.4% 5.6% 3.5% 0 0% 3.0% 6.0% % 0 50 100 -6.0% -3.0% 0.0% -100 -50 0 Q4 99 Q2 00 Q4 00 Q2 01 Q4 01 Q2 02 Q4 02 Q2 03 Q4 03 Q2 04 Q4 04 Q2 05 Q4 05 Q2 06 Q4 06 Q2 07 Q4 07 Q2 08 Q4 08 Q2 09 Q4 09 Q2 10 Q4 10 Q2 11 -15.0% -12.0% -9.0% -250 -200 -150 Absorption Vacancy Rate
  9. 9. Boom times again Calgary soaks up office space (000s sf) Vacancy Rate Calgary downtown vacancy vs. rolling average absorption (all classes) 11.7% 11.8% 9.0% 12.0% 600 800 (000s sf) Rate 6.9% 0.3% 5.5% 0 0% 3.0% 6.0% 0 200 400 -6.0% -3.0% 0.0% (400) (200) 0 -9.0% 6.0% (600) (400) Q1 01 Q3 01 Q1 02 Q3 02 Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Absorption Vacancy RateAbsorption Vacancy Rate
  10. 10. Strong rebound Montreal central area gathers steam (000s sf) Vacancy Rate Montreal central area vacancy vs. rolling average absorption (all classes) 12.3% 9 3% 8.1% 6 5% 9.0% 12.0% 15.0% 200 300 400 7.7% 9.3% 5.5% 6.5% 0.0% 3.0% 6.0% 0 100 200 -9.0% -6.0% -3.0% (200) (100) -15.0% -12.0% (400) (300) Q1 01 Q3 01 Q1 02 Q3 02 Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Absorption Vacancy Rate
  11. 11. GTA suburban growthGTA suburban growth Aerocentre BMO Meadowvale building Hazel General Mississaugag 1919 Minnesota court
  12. 12. Recovery takes hold Suburban demand gains traction Rolling absorption vs. vacancy (all classes) 25.0%1000 (000s sf) Vacancy Rate 19.4% 15 0% 20.0% 600 800 12.0% 9.5% 8.2% 10.0% 15.0% 400 600 7.7% 6.6% 0.0% 5.0% 0 200 -10.0% -5.0% -400 -200 92 92 93 94 95 95 96 97 98 98 99 00 01 01 02 03 04 04 05 06 07 07 08 09 0 0 1 Rolling Average Absorption Vacancy Rate Q19 Q49 Q39 Q29 Q19 Q49 Q39 Q29 Q19 Q49 Q39 Q20 Q10 Q40 Q30 Q20 Q10 Q40 Q30 Q20 Q10 Q40 Q30 Q20 Q11 Q41 Q31
  13. 13. Positioned for growth Low supply supports recovery GTA West new supply vs. Q4 vacancy class A 160000.0% 180000.0% 200000.0% 160000.0% 180000.0% 200000.0%16.8% 14 0% 16.0% 18.0% 1600 1800 2000 (000s sf) 100000.0% 120000.0% 140000.0% 100000.0% 120000.0% 140000.0% 10.3% 10.1% 8 0% 10.0% 12.0% 14.0% 1000 1200 1400 20000 0% 40000.0% 60000.0% 80000.0% 20000 0% 40000.0% 60000.0% 80000.0% 6.9% 5.2% 2 0% 4.0% 6.0% 8.0% 200 400 600 800 0.0% 20000.0% 0.0% 20000.0% 0.0% 2.0% 0 200 2000 2001 2002 2003 2008 2009 2010 2011 YTD New Supply Vacancy Rate
  14. 14. Moving in the right direction Absorption pushes towards expansionary demand GTAWest average absorption (all classes) 2008 recession (000s sf) 400 375 450 (000s sf) 250 150 225 300 11 81 0 75 -87 -150 -75 Year 1 Year 2 Year 3 Expansion Demand Hot Demand
  15. 15. Recessionary impact Different experiences for GTA West submarkets (000s sf) GTA West - total absorption (class A) 400 600 800 0 200 400 (400) (200) (600) Airport 427 Corridor Oakville Hurontario Meadowvale Mississauga Corporate Centre 1st 9 quarters of recession: Q4 2008 to Q4 2010 Past 3 quarters Q4 2008 to Q4 2010
  16. 16. Slow but sure GTA suburban markets recovery rates 16% Vacancy Rate Vacancy all classes 14.5% 12.0% 10.7%10.6% 10.3%10 0% 10% 12% 14% 6.8% 10.0% 8.3% 6% 8% 10% 3.7% 0% 2% 4% -2% 0% West East North 2003 D t P k 2008 R i P k C t Q1 11Q1 03 Q3 11 Q1 03 Q2 10 Q3 11 Q1 04 Q4 09 Q3 11 2003 Downturn Peak 2008 Recession Peak Current
  17. 17. Suburban demand drivers Key observations Demand will likely slow by mid-2012 and pick up again in 2013Demand will likely slow by mid 2012 and pick up again in 2013 “New normal” demand may emerge; lower than historical averages Sl d US dSlower recovery due to greater exposure to US economy and stimulus measures Tighter than after past recessions because of the low new supply,g p pp y, which will support faster recovery
  18. 18. And now for DowntownAnd, now for Downtown Toronto
  19. 19. Who would’ve guessed? Demand reached record highs through the Great Recession Downtown vacancy vs. average absorption (all classes) (000s sf) Vacancy Rate 19.1% 11.9% 5.0% 15.0% 20.0% 450 600 750 Rate 3 1% 3.6% 6.8% 5.0% 10.0% 150 300 450 3.1% -5.0% 0.0% -300 -150 0 -15.0% -10.0% -600 -450 3Q91 3Q92 3Q93 3Q94 3Q95 3Q96 3Q97 3Q98 3Q99 3Q00 3Q01 3Q02 3Q03 3Q04 3Q05 3Q06 Q307 3Q08 3Q09 3Q10 3Q11
  20. 20. Ignited demand Telling the tale of new supply success Cumulative absorption – downtown premium space (000s sf) 2,000 3,000 (000s sf) 0 1,000 -1,000 -3,000 -2,000 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Class A &AAA 2001 Downturn Class A&AAA 2008 Recession
  21. 21. Staggering success of new buildings Corus Bay Adelaide 1,027,937 occupied RBC Centre 1,223,479 occupied Corus Building 482,000 occupied UPIEDAREATOTALOCCU 25 York Street25 York Street Maple Leaf S 18 York Street Updated Sept. 9, 2011 780,000 occupied 780,000 occupied Square 223,020 occupied 671,786 occupied
  22. 22. Sectors leading expansion DowntownToronto Q4 2009 – Q4 2011 Banks 40 4% Information & Communications 5.1% Real Estate 0.9% Government 0.1% 40.4% Other 16.1% Technology, Research & Professional Services 22 6%22.6% Other Finance & Insurance 14.8%
  23. 23. Looking for ardLooking forward •The shape of demand 2013 to 2015The shape of demand 2013 to 2015
  24. 24. Factors strengthening downtown demand Toronto increasingly seen as a prime location for global business Educated multicultural talent pool Following the talent: Business migration to downtowng g Canada’s strong banking sector -- poised for future expansion Flight to sustainable buildings & efficient high density workplacesFlight to sustainable buildings & efficient high-density workplaces Condos support growing downtown population Urban revitalization marches on – Waterfront, Union Station, new retail formats & more
  25. 25. Factors weakening downtown demand Uncertainty about impact of global economic upheaval on short- term business confidence Slowing of global stimulus as governments show greater fiscal restraintSlowing of global stimulus as governments show greater fiscal restraint Banking sector demand a hard read W k l i d i i i i d i dWork place strategies and cost saving strategies increasing density and driving down need for space
  26. 26. DowntownToronto vacancy projections Premium space (includes large blocks returning to market) Vacancy Rate (000s sf) 10 5% 12% 14% 16% 1,500 1,750 2,000 Annual Absorption (000s) Low 225 Medium 450 High 675 6.9% 8.7% 5.6% 10.5% 6% 8% 10% 750 1,000 1,250 2.3% 3.9% 2% 4% 6% 250 500 750 0%0 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 Existing Class A Buildings - Large Blocks Existing Class AAA Buildings - Large Blocks Updated Q3 2011 New Developments Vacancy Downtown Class A & AAA Vacancy Rate - High Demand Downtown Class A & AAA Vacancy Rate - Medium Demand Downtown Class A & AAA Vacancy Rate - Low Demand

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