During the past decade, Oxford Properties’ portfolio in the Greater Toronto Area (GTA) has grown by 110 per cent and by a value of nearly $11 billion.
Today, the real estate investment arm of Ontario Municipal Employees Retirement System (OMERS), one of Canada’s largest pension plans, has a construction and pre-development pipeline of 27 GTA projects that would add another $10 billion in value.
Oxford’s GTA portfolio now stands at around $17 billion in value, said Eric Plesman, Oxford’s executive vice-president, North America: “If you look at what we have ahead of us, we have seven projects under construction and a pre-development pipeline of 20 projects that is probably just north of $10 billion.”
The GTA, not surprisingly, represents Oxford’s largest portfolio and a market for which it has an “insatiable appetite.”
“We continue to look at Toronto and opportunities here across all of our asset classes,” Plesman told RENX in a recent interview.
“It is perhaps the area of our single largest concentration and it’s largely due to what we believe is some tremendous growth that Toronto has seen, and we believe we’ll continue to see.”
Union Park, The Hub central to GTA plan
Union Park, once completed, would be the largest mixed-use development in Toronto’s history. The development includes a four-tower, $3.5-billion, 4.3-million-square-foot campus that would include 3.3 million square feet of office space, approximately 800 residential rental units, 200,000 square feet of retail, food and beverage, and the opportunity for three acres of public space.
Plesman called Union Park a “transformational project” for the city.
The office component would be split into two towers of 58 and 48 storeys. The residential component would also feature two towers, of 54 and 44 storeys, RENX reported in June. Construction is expected to begin in or around 2023, pending approvals.
Meanwhile, pre-development continues on The Hub at 30 Bay St. property also in downtown Toronto. The HUB is proposed as a 1.4-million-square-foot office tower up to 60 storeys.
It is named after the tower’s proximity to the Toronto Harbour, the Union Station transportation hub and Bay Street. Oxford also said the design will incorporate the historic Harbour Commission Building which already stands at the site.
Oxford expands industrial, multi-family
Historically, Oxford had always been known as an office developer and manager but over time, it has been broadening its objectives.
Overall, about 37 per cent of Oxford’s GTA portfolio are office assets. Another 48 per cent is in retail, six per cent in industrial and seven per cent in residential.
The office portfolio has grown by 54 per cent over the past five years, while the retail business has surged by nearly 60 per cent, according to data provided by Oxford to RENX. The industrial portfolio has also climbed by 74 per cent in that period.
Ten years ago, Oxford had no industrial assets, Plesman said.
“We have a huge amount of conviction in the industrial asset class,” Plesman said. “I joined Oxford about eight-and-a-half years ago and I would say that the mandate has been (focused) . . . on building some of these other asset classes and industrial and multi-family in particular.”
That confidence is built on the rise of retail e-commerce and the overall tightness of the industrial market, which is flirting with next-to-no industrial vacancy in the GTA.
Plesman said Oxford aims to build out several asset classes to achieve a high level of diversification and capitalize on the macro-economic trends that are boosting Toronto’s fortunes.
Oxford details current asset mix, future builds
The firm’s existing Toronto assets include: the TD Canada Trust tower at 161 Bay St.; Royal Bank Plaza (at 200 Bay St.); the Richmond-Adelaide Centre; RBC WaterPark Place and Yorkdale shopping centre.
The team is now in construction of the Park Hyatt mixed-use redevelopment, its 85 Richmond redevelopment and the Square One shopping centre expansion in the neighbouring GTA city of Mississauga.
Oxford had been largely recycling capital during 2016-2018, selling off older assets that were no longer part of its strategy to make room for newer asset development and purchases, Plesman said.
Deep market, population growth
“The Toronto market is a major economic engine for the entire country,” he said.
“There is real depth to the market here in Toronto . . . across a number of different industries. You don’t really have one dominant industry as you had perhaps in the past.”
He said there is a massive tenant base across many industries that is stoking Oxford’s interest and development pipeline. In-migration, overall population growth and the city’s high level of commerce will keep Canada’s largest city central to their strategy.
“We are fiduciaries on behalf of Ontario municipal employees and we have a lot of our base here, but importantly, just given the contributions it makes to the entire country, this is an important region.”
EDITOR’S NOTE: This story was updated to correct the name of Oxford’s Union Park development. RENX apologizes for the error.