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CANADIAN NADIAN APARTME RTMENT NT INV NVESTME ESTMENT NT CON ONFE FERE RENCE NCE 2015 Ross Moore September 10 th 2015 CBRE Limited WELCOME TO CANADAS MOST DULL/STABLE MARKET! Vacancy 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%

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CBRE Limited

CANADIAN NADIAN APARTME RTMENT NT INV NVESTME ESTMENT NT CON ONFE FERE RENCE NCE 2015

Ross Moore September 10th 2015

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0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q2 2015 10-Yr Avg. Vacancy

Source: Canada Mortgage and Housing Corporation, 2015.

WELCOME TO CANADA’S MOST DULL/STABLE MARKET!

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(2%) (1%) 0% 1% 2% 3% 4% 5% 6% (80) (40) 40 80 120 160 200 240 Calgary Edmonton Montreal Winnipeg London Halifax Toronto Vancouver Ottawa Waterloo Vacancy Rate (%) Y-o-Y Change (bps) Y-o-Y Vacancy Rate Change Vacancy Rate

MU MULT LTI-FA FAMILY MILY VACANCY, NCY, MI MID-YEA YEAR R 2015 15

Source: CBRE Research, Canada Mortgage and Housing Corporation, 2015.

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Source: RealNet, Q2 2015.

Boardwalk Windsor Portfolio Skyline Apartment REIT

Market: Windsor Price: $136,200,000 Number of Units: 1,625 Price Per Unit: $83,815 Projected Transaction Date: September 10, 2015

High Park Village Buildings 1, 3, 5 & 7 GWL Realty Advisors (50%)

Market: Toronto Price: $124,654,198 Number of Units: 990 Price Per Unit: $251,826 Transaction Date: April 30, 2015

High Park Village Buildings 2, 4 & 6 CPPIB (60%)

Market: Toronto Price: $104,574,797 Number of Units: 750 Price Per Unit: $232,388 Transaction Date: June 30, 2015

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Source: RealNet, Q2 2015.

Langara Gardens Concert Properties Ltd.

Market: Vancouver Price: $101,857,500 Number of Units: 621 Price Per Unit: $328,043 Transaction Date:

  • Jan. 9, 2015

Airdrie Place Apartments Private Investor

Market: Calgary Price: $64,285,000 Number of Units: 300 Price Per Unit: $214,283 Transaction Date:

  • Jan. 6, 2015

Kingsclub (33%) CAPREIT

Market: Toronto Price: $60,300,000 Number of Units: 506 Price Per Unit: $322,978 Announced Date: July 2015

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Source: RealNet, Q2 2015.

50 Spadina Rd. & 35 Walmer Rd. Starlight Properties

Market: Toronto Price: $59,000,000 Number of Units: 229 Price Per Unit: $257,642 Transaction Date:

  • Jan. 12, 2015

The Laurier Minto Inc.

Market: Calgary Price: $50,000,000 Number of Units: 144 Price Per Unit: $347,222 Transaction Date: March 25, 2015

111 Lawton Boulevard Akelius Canada Ltd.

Market: Toronto Price: $46,000,000 Number of Units: 152 Price Per Unit: $302,961 Transaction Date: August 10, 2015

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Source: RealNet, Q2 2015.

King’s Heights Apartments Skyline Apartment REIT

Market: Calgary Price: $41,000,000 Number of Units: 192 Price Per Unit: $213,542 Transaction Date:

  • Feb. 17, 2015

Hamilton House InterRent REIT

Market: Montreal Price: $32,400,000 Number of Units: 280 Price Per Unit: $116,129 Transaction Date: March 11, 2015

The Brock Homestead Land Holdings Ltd.

Market: Burlington Price: $39,850,000 Number of Units: 115 Price Per Unit: $346,552 Transaction Date: June 11, 2015

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Market et 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 H1 2015 Vancouver

  • uver

640.3 288.6 647.0 414.5 450.1 815.1 440.9 533.0 361.0 Calgar lgary y 556.0 269.3 90.5 112.1 125.8 486.3 184.4 202.4 137.5 Edmon

  • nton

ton 659.0 202.0 139.0 160.4 157.0 121.7 317.8 269.5 191.6 Toronto to 832.0 873.9 453.1 774.0 1,066.8 1,563.3 1,585.2 1,176.5 847.2 Ottaw awa a 240.0 163.0 228.0 154.0 226.2 768.3 397.5 397.3 183.3 Montre real al 846.2 946.0 605.0 836.1 900.0 1,354.9 829.1 813.4 341.2 Halifax ifax 161.0 41.0 44.0 50.2 210.1 161.3 44.3 121.0 6.3 Nation tional al 4,404 04.3 .3 3,178 78.8 .8 2,430 30.6 .6 2,887 87.3 .3 3,569 69.9 .9 6,023 23.3 .3 4,166 66.8 .8 3,666 66.8 .8 2,173 73.7 .7

CANADIAN MULTI-RESIDENTIAL INVESTMENT VOLUME ($M) – BY MARKET

Source: CBRE Limited, RealNet Canada, Collette Plante, JLR Land Titles Solutions, Q2 2015.

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Source: CBRE Limited, RealNet Canada, Collette Plante, JLR Land Titles Solutions, Q2 2015.

CANADIAN MULTI-RESIDENTIAL PURCHASER PROFILE – ALL TRANSACTIONS

0% 20% 40% 60% 80% 100% 2009 2010 2011 2012 2013 2014 H1 2015 Private Investor – Canadian REIT/REOC Foreign Investor Pension Fund Institution Private Equity

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CANADA’S ACTIVE PENSION FUNDS IN REAL ESTATE

Select Canadian Pension Funds

Source: Various Annual Reports, 2015.

Pension Fund Net Assets CAD (Billion) Real Estate Assets CAD (Billion)

CPPIB - Canadian Pension Plan Investment Board $264.6 $30.3 Caisse de Dépôt et Placement du Québec /Ivanhoe Cambridge $225.9 $22.9 Ontario Teachers’ Pension Plan/Cadillac Fairview Corp. $154.5 $26.6 bcIMC - British Columbia Investment Management Corporation $114.0 $16.3 PSP - Public Sector Pension Investment Board $93.7 $12.8 OMERS/Oxford Properties Group $72.1 $12.0 AIMco - Alberta Investment Management Corporation $74.7 $9.2 HOOPP - Healthcare of Ontario Pension Plan $60.8 $7.7

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  • Demand drivers
  • Immigration
  • “We’re becoming a multi-housing society”
  • And we’re becoming more urban
  • Housing affordability
  • Demographics
  • Make-up of the Canadian Apartment market
  • Where and what
  • And now for some construction
  • And rents

FOR CONSIDERATION……….

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20 40 60 80 100 120 140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (000’s) Calgary Vancouver Toronto Montreal

IM IMMI MIGR GRATIO ATION: N: FUELS DEMA MAND ND

Source: Conference Board of Canada, Q2 2015.

Forecast*

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CANADA MOVING TOWARDS MULTI-RESIDENTIAL LIVING

Source: The Conference Board of Canada, Q2 2015.

30 50 70 90 110 130 150 Q2 2001 Q4 2001 Q2 2002 Q4 2002 Q2 2003 Q4 2003 Q2 2004 Q4 2004 Q2 2005 Q4 2005 Q2 2006 Q4 2006 Q2 2007 Q4 2007 Q2 2008 Q4 2008 Q2 2009 Q4 2009 Q2 2010 Q4 2010 Q2 2011 Q4 2011 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 (000’s) Housing Starts, Multiples Housing Starts, Singles

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22.1% 17.7% 13.0% 11.6% 7.0% 15.2% 5.5% 6.6% 0% 5% 10% 15% 20% 25% Toronto Calgary Montreal Vancouver Urban Suburban 2010-2015 Population Change URBAN

AN & S & SUBURBA URBAN GROWTH OWTH

Source: Environics Analytics, 2015.

* Urban defined as 2 km radius from city centre.

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50 100 150 200 250 300 350 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Q2 2015

Index = 100 (1992)

National Avg. Home Price National Avg. 2-Bdrm Monthly Rent Personal Income Per Capita

Source: Canadian Real Estate Association, Canadian Mortgage and Housing Corporation, Conference Board of Canada, Q2 2015.

AFF FFOR ORDABILITY DABILITY GAP CON ONTINUE TINUES S TO O WI WIDE DEN

$453,560 $1,107 $41,944

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2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 2010 2011 2012 2013 2014 2015 2016 2021 2026 2031 2036 Age 20 - 34 Age 65+

DE DEMOGR MOGRAPH APHIC IC TRENDS ENDS IN IN CANADA DA

Population Growth (000’s)

Source: CBRE Research, Statistics Canada, 2015.

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CANADIAN APARTMENT DISTRIBUTION (UNITS)

Source: Canadian Mortgage and Housing Corporation, Conference Board of Canada, 2015.

0.0 1.5 3.0 4.5 6.0 7.5 9.0 100,000 200,000 300,000 400,000 500,000 600,000 Montreal Toronto Vancouver Edmonton Ottawa Winnipeg Halifax Calgary Millions Inventory (L) Population (R)

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PERCENTAGE OF UNITS RENTED – CMA’S

Source: Canadian Mortgage and Housing Corporation, Statistics Canada, 2015.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Montreal Vancouver London Ottawa Winnipeg Toronto Edmonton Waterloo Region Halifax Calgary Total Units Rented Apartment Units Rented

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7% 14% 51% 28% Less than 15 Years 15 - 35 Years 36 - 55 Years Greater than 55 Years

1960/1979 1980/2000 2001/2015

CANADIAN APARTMENT INVENTORY BY AGE

Source: Canadian Mortgage and Housing Corporation, June 2015.

Pre - 1960

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7% 14% 51% 28% Less than 15 Years 15 - 35 Years 36 - 55 Years Greater than 55 Years

1960/1979 1980/2000 2001/2015

CANADIAN APARTMENT INVENTORY BY AGE

Source: Canadian Mortgage and Housing Corporation, June 2015.

Pre - 1960

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Toronto Vancouver Montreal Edmonton Calgary Ottawa Rental 875 1,571 2,155 1,329 300 121 Condominium 11,269 4,764 2,681 2,607 2,577 620 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Source: Canada Mortgage and Housing Corporation, June 2015.

MU MULT LTI-FA FAMILY MILY UNIT IT STARTS RTS 2015 15-YTD YTD JU JUNE

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0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Vancouver Calgary GTA Edmonton Ottawa Montreal Condo Rental Universe as % of Purpose Built Rentals

Source: Canada Mortgage and Housing Corporation, 2015.

JU JUST T HO HOW W BIG IG IS IS THE HE CON ONDO DO RENTAL TAL UNIV IVERSE ERSE?

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PURPOSE OSE-BU BUILT ILT RENTA NTAL L CON ONSTRUCTION STRUCTION

Source: Canadian Mortgage and Housing Corporation, H1 2015.

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 500 1,000 1,500 2,000 2,500 Montreal Vancouver Edmonton Toronto Calgary Ottawa % of Inventory Units Started H1 2014 Starts H1 2015 Starts % of Inventory H1 2014 % of Inventory H1 2015

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APARTMENT TMENT RENTS NTS

(2%) 0% 2% 4% 6% 8% 10% 12%

  • $400
  • $200

$0 $200 $400 $600 $800 $1,000 $1,200 Toronto Vancouver Calgary Edmonton Ottawa CANADA Halifax Waterloo London Winnipeg Montreal Composite Rental Rate (L) Y-o-Y Rental Growth Rate (R)

Source: CBRE Research, Canada Mortgage and Housing Corporation, H1 2015.

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$600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 Bachelor One-Bdr Two-Bdr Three-Bdr Overall Avg. Monthly Rental Rate Mid-year 2013 Mid-year 2014 Mid-year 2015

RENTAL TAL RATE TE BY UNIT IT TYPE

Source: CBRE Research, H1 2015.

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MU MULT LTI-FA FAMILY MILY RENTA TAL L RATES ES

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Q2 2015 Bachelor 1 bed 2 bed 3 bed Average

Source: Canada Mortgage and Housing Corporation, CBRE Research, Q2 2015.

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AVERAG RAGE E RENTAL TAL RATE E GROWTH OWTH - TOR ORONTO ONTO

80 90 100 110 120 130 140 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q2 2015 Index = 100 (2000) Class A Office (Downtown) Class A Office (Suburban) Industrial Multifamily

Source: CBRE Research, Q2 2015.

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75 100 125 150 175 200 2007 2008 2009 2010 2011 2012 2013 2014 2015 Index = 100 (2007) Toronto - 2 Bdrm Monthly Rent Ontario Energy Mid-Peak Prices (¢/kWh)

ELECTRICITY PRICES (¢/KWH) VS. 2 BEDROOM MONTHLY RENT

Source: Ontario Energy Board, Canadian Mortgage and Housing Corporation, & CBRE Research, 2015.

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$400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 Toronto Vancouver Ottawa Calgary Edmonton Montreal Composite Monthly Rate Rental Condo

RENTAL TAL RATE TE: : CON ONDO DO VS. . RENTA NTAL

Source: Canada Mortgage and Housing Corporation, CBRE Research, H1 2015.

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$4,285 $3,399 $3,133 $3,059 $2,769 $2,591 $2,355 $1,895

,895

$1,670 $1,540 $1,300

London Singapore New York Dubai Hong Kong Sydney Paris Toronto Frankfurt Manchester Milan

AVERAGE MONTHLY RENT PER CITY (CAD)

Source: CBRE Research, Q2 2015.

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NEW CONSTRUCTION - DOES IT MAKE SENSE?

LAN AND CON ONST STRUCT RUCTION ION SO SOFT TOT OTAL AL $7 $75. 5.00 00/ / $1 $100 00.0 .00 + $2 $250 50.0 .00 + $5 $50. 0.00 00 = = $3 $375 75.0 .00

NO NOI

$1 $1.6 .60/SF/MO 0/SF/MO = 4.6%

4.6% CA CAP RA P RATE? TE? CO COST ST

$4 $415. 15.00 00

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0% 2% 4% 6% 8% 10% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q2 2015 10-Yr Bond Yield Office - CBD A Industrial - A & B Retail - Neighbourhood Multi-Res - High Rise A

273 3 bps

NATIONA IONAL L CAP RATES TES VS. . 10-YR YR BON OND D YIE IELD LD

Source: CBRE Research, Bank of Canada, Q2 2015.

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0% 2% 3% 5% 6% 8% Vancouver Calgary Edmonton Toronto Ottawa Montreal Halifax Cap Rate - 2010 Cap Rate - Q2 2015

MU MULT LTI-FA FAMILY MILY CAP RATES TES* * BY MA MARKE KET

Source: CBRE Research, Q2 2015. *High Rise B

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CONCLUDING COMMENTS

  • Demand going forward will be

more nuanced

  • Construction is far from a

permanent feature, but…

  • Record setting pricing will

drive new construction

  • The yin and yang relationship

with the ownership market

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CBRE Limited

THA HANK K YOU OU

Ross Moore, Director, CBRE Canada Research