This session is sponsored by:
Panelists David Ward Director, Acquisitions, Morquard Investment Limited Ted Welter Managing Director, Real Estate & Mortgage Investments Greystone Managed Investments Inc . John Williams President North Prairie Developments Ltd. Greg Yuel President & CEO PIC Investment Group Inc .
Economic Outlook Real GDP Growth 6.00% For the last 4 years Saskatchewan has mirrored Alberta in terms of GDP growth. This trend is now forecasted by Stats Canada to continue into the future. 5.00% 4.00% 3.00% Sask Alberta Manitoba 2.00% 1.00% 0.00% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014 F
Noteworthy Investment Sales 2012 Saskatoon Regina 2250 7 th Ave N, 443 Lorne 2002 Airport Drive (Hotel) Street N, 2235 8 th Ave N $37,150,000 Cap: 6.5% $5,175,00, Cap: 6.98% • 250 Units, $148,600/unit • 45 Units, $115,000/Unit, Multi-family 301 Confederation Drive 4250 Albert Street $18,350,000, Cap: 6.6% $9,600,000, Cap: 7.38% • 74,156 SF, Retail • 41,238 SF, Retail Building 838 48 th Street East 1832 Victoria Avenue East $18,270,000, Cap: 6.46% $8,744,990, Cap: 6.81% • 65,698 SF, Office • 39,530 SF, Retail Building 402 McDonald St., 651 118 & 124 Tubby Cres, 941 60 th Henderson Dr., 310 Hoffer Dr. St. E $17,700,000, Cap: 7.44% $10,650,000, Cap: 6.9% • Industrial Building
2012 Western Canada Cap Rates 8.00% Vancouver 7.00% Calgary Edmonton 6.00% Saskatoon Regina Winnipeg 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Office Retail Industrial Multi-Family
2012 Saskatoon & Regina Cap Rates 8.00% 7.00% 6.00% 5.00% 4.00% 7.44% 6.98% 6.90% 6.90% 6.81% 6.60% 6.46% 3.00% 6.00% 2.00% 1.00% 0.00% Office Retail Industrial Multi-Family Saskatoon Regina
Farm Land Values 1984 - 2012 Farmland increased 1.04% annually since ’84; 4.2% annual increase since 2010. 30.00% 20.00% 10.00% 0.00% 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -10.00% -20.00% Saskatchewan Alberta Manitoba - Saskatchewan Outlook - Farmland values have seen a trend of increasing prices since 2002. In the past year, average prices for an acre of farmland in northern Saskatchewan have risen from $650 to $1,200 per acre to $800 to $1,100 per acre, while prime farms in southern Saskatchewan are being bid as high as $2,000 per acre. - Thus far in 2013 farmland values in Saskatchewan have increased by 9.7%, Manitoba values increased 13.9% and Alberta by 7.2%. - During the last 6 months the price of lower-valued land experienced a greater increase. - Interest from out-of-province buyers continued. Retiring farmers sold large blocks of land to take advantage of the strong prices to sell their entire operation.
Saskatchewan Cap Rate Analysis: The current yield on a 10-year Government of Canada (GoC) bond is approximately 1.70%, ~430 bps below the current national average cap rate of 6.00%, and ~500 bps below the average Saskatchewan cap rate of 6.70%. This spread is well above the historical national average of 323 bps since 1990, and above the maximum national average spread of 451 bps at year-end 2011. *Calculated based on the average cap rate for all property sectors excluding hotel. 8.00% 403 bps 6.70% 7.00% 6.00% 6.00% Historical National Average 4.93% 5.00% 500 bps 4.00% 430 bps 3.00% 1.70% 2.00% 1.00% 0.00% 10-year GOC bond Canadian Average Saskatchewan Average
Information Supplied By: ICR would like to thank the following for supplying information used in this presentation:
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