You know you need to make international real estate investments but you are not sure which approach makes the most strategic sense? Not sure which country, or even which continent, to pursue. With the accelerating importance of global real estate markets, real estate professionals across Canada and around the world are asking the same question.
In Canada, we can learn from a wealth of experience acquired by real estate companies who have blazed a trail in foreign property investment. While Canadian investment in U.S. markets has taken place for many years, recent transactions by large real estate firms and the real estate units of Canadian pension funds show current trends in foreign property investments.
Brookfield Asset Management owns $16-billion (U.S.) of property on three continents including an office portfolio in North America and Europe and $U.S. 1-billion in residential assets. Earlier this year, Brookfield created a $700-million real estate fund, $200-million of that from Brookfield and the rest from four institutional investors to buy shopping centres in Brazil (Globe and Mail, September 9, 2006 ). Also in 2006, Brookfield issued an IPO for US$557-million, the largest IPO in Brazil to date, to finance the activities of BRP, a Brookfield home-building subsidiary also in Brazil. (CCNMatthews, November 14, 2006)
SITQ, the real estate division of the Caisse de Depot (CDP) , has investments in the United States, France, the United Kingdom and Germany. As well as acquiring properties, the SITQ, with local partners, is developing properties such as the T1 Tower, a 37-storey office building and an 11-storey office building in La Defense district of Paris. It is also developing three office buildings in London, U.K. as well as one in Washington, D.C. where it has a 100% interest.
Ivanhoe Cambridge, a shopping centre company, also part of CDP, has 30 per cent of the company's assets invested outside Canada including the United States, Europe (France, Germany, Poland, Spain and the United Kingdom) and Asia (China). In September, Ivanhoe Cambridge announced a $100-million joint venture deal in Brazil. Ivanhoe bought a stake in three regional shopping centres owned by a family-run company, Ancar Empreendimentos Comerciais, as well as a stake in the firm's property management company.
Cadillac Fairview Corp. a unit of the Ontario Teachers Pension Plan has investments outside North America that now account for 9 per cent of Cadillac Fairview's $13-billion (Canadian) real estate portfolio. According to a Globe and Mail report, the company intends to raise that to between 15 and 20 per cent over the next three to five years. This year Cadillac bought a 46% stake in Multiplan Emprendimentos Imobiliarios SA, a private real estate company based in Rio de Janeiro. Multiplan manages 14 regional malls in Brazil and has an ownership stake in nine of those sites.
The Canadian Investmet Plan (CPP) fund's $5.1 billion real estate portfolio contains mostly office and retail commercial properties located in Canada and to a lesser extent in the U.S. and Western Europe. In May, CPP and ING Real Estate Investment Management UK announced the acquisition of two City of London office buildings. (CPPIB News Release, May 15, 2006)
The IPD, located in the U.K., is dedicated to the objective measurement and analysis of property in different countries. It has developed a series of IPD indices for measuring performance for over 20 countries including Canada, the U.S., Japan, Australia and numerous European countries. The IPD website offers a graphical display of the IPD indices performace for 1, 3 and 5 years that is worth checking out. The IPD Canadian Property Index representative in Canada is Patricia Arsenault of Clayton Research.
The Tuesday, November 28th Global Property Market (only $350.00 plus tax) is going to provide a birds eye view of Global Property Investment and profile the experiences of Canadian companies investing abroad. Over 30 experts in international real estate investments will be on hand at the conference to make presentations and provide direction to those venturing into Global real estate markets.