2016 Commercial Real Estate. Review and Forecast

Transcription

1 2016 Commercial Real Estate Review and Forecast February 4, 2016

2 Colliers International Saskatchewan

3 Economic Overview

4 Real GDP Growth 6.0% f 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% Vancouver Calgary Edmonton Regina Saskatoon Toronto 4 Source: Conference Board of Canada

5 Commodity Prices Potash Price (per Metric Ton) Crude Oil (Petroleum) Price (per Barrel) Wheat Price (per Metric Ton) Uranium Price (per Pound) Price Per Metric Ton (Potash/Wheat) $ $ $ $ $ $ $0.00 Dec-15 Aug-15 Apr-15 Dec-14 Aug-14 Apr-14 Dec-13 Aug-13 Apr-13 Dec-12 Aug-12 Apr-12 Dec-11 Aug-11 Apr-11 Dec-10 Aug-10 Apr-10 Dec-09 $ $ $ $80.00 $60.00 $40.00 $20.00 $0.00 Price Per Barrel (Crude Oil/Uranium) 5 Source: InfoMine

6 Unemployment Rate 9.0% Saskatoon Saskatchewan Canada 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2016 (f) Source: Conference Board of Canada

7 Population Growth 4.0% Saskatoon Saskatchewan Canada 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2016f Source: Conference Board of Canada

8 Saskatoon Housing Starts Saskatoon Multiples Saskatoon Single 3,500 3,000 2,500 2,000 1,500 1, f Source: City of Saskatoon

9 Saskatoon Building Permits $1,200 Other Industrial Multi-Family Institutional/Assembly Commercial Residential $1,000 $800 $600 $400 $200 $ Source: City of Saskatoon

10 Residential Sales Prices $500,000 $400,000 $300,000 $200,000 $100,000 Jan-07 Saskatoon Forecast Regina Saskatoon Calgary Edmonton Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15 Sep-15 May Source: CREA

11 Office Market

12 National Snapshot: CBD Office Market Inventory (SF) 254 M 258 M Vacant Space (SF) 16.3 M 22.1 M Vacancy Rate 6.5% 8.5% Net Absorption (SF) 0.2 M -1.1 M Under Construction (SF) 14.2 M 10 M 12 Source: Colliers International

13 CBD Office Construction Toronto, ON Calgary, AB Edmonton, AB Montréal, QC Vancouver, BC Halifax, NS Victoria, BC Waterloo Region, ON Ottawa, ON Regina, SK Saskatoon, SK Winnipeg, MB 0 1,000,000 2,000,000 3,000,000 4,000, Source: Colliers International

14 National Vacancy Rate Snapshot: CBD Office % 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Montréal Toronto Regina Saskatoon Winnipeg Edmonton Calgary Vancouver 14 Source: Colliers International

15 Class A Office Net Rents and Occupancy Costs Occupancy Costs Net Rent $60 $50 $40 $30 $20 $10 $0 Ottawa Montréal Toronto Regina Saskatoon Edmonton Calgary Vancouver 15 Source: Colliers International

16 Saskatoon Office CBD Absorption New Supply Vacancy Rate Absorption & New Supply (SF) 250, , , ,000 50, , , % 20.0% 15.0% 10.0% 5.0% Vacancy Rate -150, % 2016F Source: Colliers International

17 Saskatoon Office Suburban Absorption New Supply Vacancy Rate Absorption & New Supply (SF) 180, , , , ,000 80,000 60,000 40,000 20, % 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Vacancy Rate Source: Colliers International

18 Saskatoon Office Space Inventory Growth Total Suburban Inventory Total CBD Inventory 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Source: Colliers International

19 Saskatoon Occupied Office Space Suburban Total Occupied Space CBD Total Occupied Space 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Source: Colliers International

20 Notable Office Transactions 20

21 Office Market Observations and Forecast Vacancy could reach 19% in CBD by Q CBD market will rebound by Continued growth for suburban office market Opportunity for tenants to expand or upgrade 21

22 Industrial Market

23 National Snapshot Inventory (SF) 1.8 B 1.9 B Vacant Space (SF) 70.1 M 66.3 M Vacancy Rate 4.0% 3.5% Net Absorption (SF) 4.3 M 15.0 M Under Construction (SF) 15.7 M 19.6 M 23 Source: Colliers International

24 Canadian Vacancy Rates 8.0% % 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 24 Calgary Edmonton Saskatoon Regina Winnipeg Toronto Source: Colliers International

25 Canadian Net Rent Snapshot $ $10 $8 $6 $4 $2 $0 25 Calgary Edmonton Saskatoon Regina Winnipeg Toronto Source: Colliers International

26 Saskatoon Industrial Vacancy, New Supply and Absorption 1,300,000 Absorption New Supply Vacancy Rate 8.0% Absorption & New Supply (SF) 1,100, , , , , , , , % 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Vacancy Rate Source: Colliers International

27 Sale Price per Acre $800, $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 27 Calgary Edmonton Saskatoon Regina Winnipeg Toronto Source: Colliers International

28 Sale Price per Square Foot $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 28 Calgary Edmonton Saskatoon Regina Winnipeg Toronto Source: Colliers International

29 Notable Industrial Sale Transactions 29

30 Notable Industrial Lease Transactions 30

31 Industrial Market Observations and Forecast Lease rates continue to decline Three year supply of current vacant inventory Land absorption has slowed down New construction has not slowed down 31

32 Retail Market

33 33

34 The Restaurant Craze 34

35 The Fitness Craze 35

36 Liquor 36

37 Retail Sales Growth 10.0% f 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% Vancouver Calgary Edmonton Saskatoon Regina Winnipeg Toronto Montréal Ottawa 37 Source: Conference Board of Canada

38 Inventory and Vacancy Rate 16,000,000 Total Inventory Vacancy Rate 4.5% 14,000,000 12,000, % 3.5% 3.0% 10,000, % 8,000, % 6,000,000 4,000, % 1.0% 0.5% 2,000, % Source: Colliers International

39 Inventory by District 2,500, ,000,000 1,500,000 1,000, , CBD 8th St 22nd St 51st St Preston Crossing Stonebridge Blairmore Riversdale Sutherland University Heights Broadway Circle Drive Source: Colliers International

40 Net Rent by District $40 $35 $30 $25 $20 $15 $10 $5 $0 40 Stonebridge Kensington 8th St Preston Crossing Broadway Ave Blairmore University Heights CBD 51st St Circle Drive East Idylwyld Drive Riversdale 22nd St Sutherland Source: Colliers International

41 Notable Developments and New Tenants 41

42 Notable Developments and New Tenants 42

43 Retail Market Observations and Forecast Vacancy rates will rise in 2016 Downward pressure on lease rates Tenant relations will be important moving forward Management of occupancy costs will be important for tenant retention 43

44 Investment Market

45 5 Year Mortgage Rate Jan Interest Rate Source: Bank of Canada

46 TSX / S&P REIT Index $180 $175 $170 $165 $160 $155 $150 $145 $140 $135 Jan-16 Nov-15 Sep-15 Jul-15 May-15 Mar-15 Jan-15 Nov-14 Sep-14 Jul-14 May-14 Mar-14 Jan-14 Nov-13 Sep-13 Jul-13 May-13 Mar Source: TSX

47 National Buyer Profiles 100% 90% 80% 70% 60% 50% 40% User/Other Cross Border Institutional 30% Private 20% Public Listed/REITS 10% 0% Source: Real Capital Analytics

48 Saskatoon 2015 Buyer Profile Private User/Other Public Listed/REIT 48 Source: Colliers International

49 Saskatoon Transactions > $1 million $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $ Source: Colliers International

50 Saskatoon Transactions by Asset Class 2015 Land 39.3% Industrial 35.5% Multi-Family 12.1% Retail 8.3% Office 4.9% 50 Source: Colliers International

51 Multi-Family $120,000 Transactions $/Suite 40 Sale Price Per Suite $100,000 $80,000 $60,000 $40,000 $20, Number of Transactions $ Source: Colliers International

52 Industrial Sale Price PSF / Avg Net Rent Average Sale Price PSF Net Rate PSF $ $14.00 Sale Price Per SF $ $ $ $ $80.00 $60.00 $40.00 $20.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 Net Rent Per SF $0.00 $ F Source: Colliers International

53 Saskatoon Cap Rates by Asset Class Office Industrial Retail Multi-Family 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Colliers International

54 Notable Transactions 54

55 Notable Transactions 55

56 Summary Changing Markets Tenant Opportunities Private Investors Lower for Longer... Or not? 56

57 Thank You