2017 Conference Program
Thursday, September 7, 2017
WELCOME & OPENING REMARKS
|Neil Downey||Adam Paul|
Neil Downey, Managing Director, Global Equity Research, RBC Capital Markets
Adam Paul, President & CEO, First Capital Realty
UPDATE ON CANADIAN REITS: OUTPERFORMING THE CAPITAL MARKETS?
Since the beginning of the year, the Canadian REIT market has continued to outperform its 2016 results, many other asset classes, and the TSX overall. The opening presentation will provide an update on some of the key factors that have contributed to this trend and the results over the first half of 2017, both positively and negatively. The commentary will conclude with a few observations on where the market appears to be heading over the next twelve months.
William Wong, Managing Director, RBC Capital Markets Real Estate Group
THE BUYSIDE ROUNDTABLE: WHAT IS YOUR MAJOR INVESTMENT CRITERIA AT THIS TIME? WHAT KEY TRENDS IN THE REIT MARKET ARE YOU MONITORING?
A wide ranging discussion among portfolio managers on their views of the Canadian securitized real estate market, whether this is a good time to buy, sell or hold REIT units and REOC shares, and what are the key expectations that govern their current investment decision-making.
- With the REIT sector maturing, are you now focused on total return vs. purely income return? How much attention to you pay to the growth strategies when REITs and REOCs report?
- What do you expect will likely happen to unit values and funds flows over the next twelve months? Where are we in the cycle? What has changed since last year?
- Are you concerned at all about the rising interest rates in the U.S.? What implications will that have on your investments in Canadian REITs and REOCs?
- How active should Canadian REITs be in development domestically and buying foreign properties?
- Is development risk being factored in? Is NAV growth being delivered by development?
- Is it good idea for REITs to move into property types that are new to them in order to grow or to enter markets in other countries?
- Are the quality and the current valuations of the assets held by REITs generally satisfactory to you or do you have any concerns?
- What is the right capital structure and appropriate level of debt for a Canadian REIT?
- Are you concerned with how REITs can become better companies with respect to their governance and reporting?
- How much of a bifurcation is there between smaller and larger REITs?
- Do you think that more M&A will occur in the REIT/REOC sector? What type of REITs will be the targets? What types of entities will be the buyers?
Neil Downey, Managing Director, Global Equity Research, RBC Capital Markets
Tom Dicker, Vice President and Portfolio Manager, 1832 Asset Management LP
Michael Missaghie, Vice President & Senior Portfolio Manager, Sentry Investments
John Murphy, Vice President, Real Estate Securities Analyst, Cohen & Steers
Joshua Varghese, Portfolio Manager, Signature Global Asset Management, CI Investments
WHERE ARE REITS, PENSION FUNDS, LIFECOS AND PRIVATE EQUITY INVESTORS FOCUSING?
A panel of investment executives will provide their perspectives on buying and selling opportunities in major markets across the country. Part of the story for the past year has been a familiar one: a market imbalance where the amount of capital trying to buy assets continues to exceed quality investment opportunities in the most favoured property classes and cities. What is the likelihood of greater liquidity emerging in the Canadian market? What is the prevailing view of Edmonton, Calgary and Saskatchewan markets given the economic impacts they have experienced in the past few years? Are any of these considered to be a flyover zone? What are the differences between a REIT vs. a pension fund or lifeco vs. a private equity fund in pricing properties and accessing investment capital at this time? Some pension and private equity funds have done joint ventures with REITS. How has this worked out? Will shifts in appetite for real estate by institutional and private equity investors affect Canadian REITs or Canadian direct investment markets? Where do they expect cap rates to trend in 2018?
Colin Johnston, President, RVA, Canada, Research, Valuation & Advisory, Altus Group
Colin Baryliuk, Managing Director, Investments, KingSett Capital
Stephen Taylor, Vice President, Real Estate, HOOPP
Vlad Volodarski, CFO & Chief Investment Officer, Chartwell Retirement Residences
Ted Willcocks, Global Head, Asset Management, Manulife Real Estate
CONCURRENT SESSIONS (Select A1, A2 or A3)
ARE REITS AND REOCS ASSUMING GREATER RISKS AS THEY INCREASINGLY UNDERTAKE DEVELOPMENT? WHAT STEPS ARE THEY TAKING TO MITIGATE RISK?
As city building surges across Canada, many REITs and REOCs are undertaking development as a key growth strategy. Cap rate compression and the lack of quality assets for sale make it difficult for them to grow by acquisition only. Market forces are very conducive for intensification resulting in all forms of development. The economics of building new assets are compelling when compared with cap rates to buy existing ones. This panel will examine these questions in greater detail. How can REITs pursue development strategies successfully when their original structure was not designed with this capability in mind? Are there practical issues that make it difficult for REITs to develop? Are REITs well equipped to manage large development programs? How do investors, portfolio managers and analysts view REIT development strategies? How much risk does development introduce into the space? What have been the experiences of REITs to-date with new developments especially where they are mixed-use projects vs. a pure play? Are investors adequately compensated for development activities?
Mike Czestochowski, Executive Vice President, CBRE Limited
Pammi Bir, Director, Real Estate & REITs Analyst, Scotiabank
Jonathan Gitlin, Senior Vice President, Investments, RioCan REIT
Jason Lester, Vice Chair, Development, Dream Unlimited
Andrew Melton, President & CEO, Melcor REIT
Jodi Shpigel, Senior Vice President, Development, First Capital Realty Inc.
THE OFFICE MARKET ACROSS CANADA: WHAT CHALLENGES DOES IT FACE IN WHICH CITIES? CAN REITS FIND GROWTH IN THIS ASSET CLASS?
Canada’s office market of more than 500 million sq.ft. continued to soften in some cities while experiencing lower vacancy rates in others. What were the reasons for these trends when you consider that our major cities are witnessing the largest surge in new development in almost 30 years? How much absorption has there been? What are the challenges to achieving more? How have Toronto, Vancouver and Montreal performed compared with other markets? How have the suburbs fared relative to the downtown cores? What are owners of older properties doing to try to compete against the attributes of the new higher performance green certified buildings? How is the “brick and beam” market performing? What is the impact of tenants rethinking their workplaces and space requirements? What are the key priorities of tenants on a stratified basis? Are leasing trends in step with valuations and cap rates? Are office assets a very favourable part of a REIT portfolio at this time?
Scott Antoniak, President & CEO, Slate Office REIT
Tom Burns, Executive Vice President & COO, Allied Properties REIT
Michel Léonard, President & CEO, BTB REIT
Derek Warren, Assistant Vice President, Portfolio Manager, Lincluden Investment Management
Dennis Wong, Executive Vice President, Asset Management, Western Region, Artis REIT
INDUSTRIAL REAL ESTATE MARKETS: WHAT ARE REIT STRATEGIES IN THIS ASSET CLASS?
Can a case be made that industrial real estate has been on a strong comeback trail for the past few years? This session will examine major investment, leasing and development trends in this multi-billion square foot property class across Canada today. To what extent can it still be categorized as a tale of two submarkets comprised of new modern warehousing buildings vs. older vintage properties bordering on obsolescence? What does the future hold for B and C class aging and out-dated buildings? What are the greatest sources of demand for space and in which markets? What kind of tenants are propelling growth at this time? How are industrial tenant requirements changing? How are landlords responding? Do rent levels now support new development in most markets? What is needed in order to move NERs higher in Toronto and Montreal? How are markets in the West performing (Vancouver, Calgary and Edmonton)? What is the U.S. experience currently in this asset class? How strong is investor interest overall in industrial properties?
Tony Bird, Vice President, Eastern Canada Industrial, CREIT Management LP
Paul Dykeman, Chief Executive Officer, Summit Industrial Income REIT
Scott Frederiksen, Chief Executive Officer, WPT Industrial REIT
Kevan Gorrie, President & CEO, Pure Industrial Real Estate Trust
CONCURRENT SESSIONS (Select B1, B2 or B3)
REITS WITH A MORE GLOBAL GROWTH STRATEGY: WHAT LESSONS CAN WE LEARN FROM REITS IN MARKETS OUTSIDE CANADA?
Some Canadian listed REITs have portfolios largely or entirely comprised of foreign assets. This panel will examine the experiences of those who have moved into global markets. Are Canadian REITs practical vehicles for investing and operating in foreign properties? What are the implications of such a strategy from the perspective of taxes, remote management, and local market knowledge? Why should Canadian investors buy Canadian REITs with foreign assets instead of buying “best in class” local REITs in foreign markets? What have been the cross-border global experiences of our REITs? How are investors responding to U.S. or European real estate owners who launch new Canadian REIT IPOs to take advantage of access to our capital? Are there opportunities for Canadian REITs to enter foreign markets where asset prices are lower, professional management is absent and ownership is fairly fragmented?
Paul Dalla Lana, Chairman & CEO, Northwest Healthcare Properties REIT
Mark Kenney, Chief Operating Officer, CAPREIT
Ian McAuley, President, American Hotel Income Properties REIT LP
Jimmy Shan, Managing Director, Equity Analyst, GMP Securities
Bruce Traversy, Head of Investments, Dream Global REIT
LEADERSHIP, GOVERNANCE AND SUCCESSION PLANNING IN THE C-SUITE
Succession planning and strong governance are two critical elements for any organization in order for the enterprise to sustain its growth, an effective management team, and support from investors. One analysis last year showed that founding chief executives still run about two-thirds of the REITs; on average, the CEOs are older than the bank chiefs as they are difficult to replace and that the average tenure of REIT directors is about 11 years. While many senior executives of REITs and REOCs are likely to be leaving their organizations in the next five to ten years, a few changes have occurred in the past year.
How can the management transition progress from an entrepreneurial one to perhaps a more institutional approach? How do organizations prepare themselves for inevitable succession in the senior ranks? What type of corporate governance is increasingly common among REITs, i.e. board composition, management/board alignment, board independence, shareholder rights and remedies? How do REITs protect themselves from activists’ attention? How much importance do analysts and investors place on evaluating the leadership at the helm of an organization? How are proxy advisory firms and organizations like CCGG impacting REITs’ governance practices?
Rags Davloor, President, COO & Corporate Secretary, RioCan REIT
Jennifer McClelland, Vice President & Senior Portfolio Manager, Canadian Equities, RBC Asset Management
Stephen Sender, Trustee, H&R REIT & Director, Sienna Senior Living Inc.
Huw Thomas, Chief Executive Officer, SmartREIT
Dean Wilkinson, REIT Analyst, CIBC World Markets
WHAT ARE THE MAJOR SOURCES OF CAPITAL FOR REITS AND REOCS IN CURRENT MARKET CONDITIONS? WHAT FINANCING STRATEGIES ARE MOST EFFECTIVE?
Access to well-priced capital is critical to the growth of publicly traded companies via acquisitions, development and other activities. This session will examine the current market conditions and environment for REITs to access debt and equity markets to meet ongoing financial needs. What are the major sources for raising capital at this time? Discussion will also focus on units/shares, preferres, converts, mortgages, mortgage bonds, unsecured debentures and revolvers. How are REITs evaluating and creating appropriate strategies to use these capital sources? Is unsecured financing continuing to be on the rise? What should be a REIT’s interest rate strategy: long vs. short? How should capital be allocated in this market? Should capital be recycled rather than raising equity? Do the capital and investor markets favour larger real estate entities or do they simply want the existing ones to get bigger? What are appropriate credit metrics? Are people following them?
David Holden, Director, RBC Capital Markets Real Estate Group
Shailen Chande, Chief Financial Officer, Northwest Healthcare Properties REIT
Floriana Cipollone, Chief Financial Officer, Plaza Retail REIT
Louis Forbes, Chief Financial Officer, CT REIT
Heather Kirk, Managing Director, Equity Research, BMO Capital Markets
Teresa Neto, Chief Financial Officer, Pure Industrial Real Estate Trust
WHAT IS THE OUTLOOK FOR CANADIAN, U.S. AND OTHER GLOBAL ECONOMIES?
An insightful presentation on the economic fundamentals that are driving the Canadian economy at this time. What is the outlook for economic growth, employment growth, inflation, interest rates, and commodity prices over the next twelve months? As the oil and resource sector continue to stagnate, what are the ramifications for Western Canada? Are manufacturing and other economic engines breathing some life in Canadian GDP growth? What does the performance of the U.S. economy and government trade policy mean for Canada? What effect are China and Europe respectively having on the global economy?
CONCURRENT SESSIONS (Select C1, C2 or C3)
WHAT NEEDS MY ATTENTION EVERYDAY: REGULATORY, ACCOUNTING AND REPORTING REQUIREMENTS THAT YOU NEED TO KNOW AND UNDERSTAND.
The reporting demands on REITs and REOCs have grown over the years well beyond the quarterly reports that provide investors, analysts and the public with a detailed update on their financial performance along with strategic thinking on go-forward basis. This session will examine some of the key elements that are placed on these public real estate entities, their accountability and their transparency. Discussion will examine what are the prevailing benchmarks that investors are looking for, stakeholder relations beyond the buyside, current and emerging changes in accounting practices, the range of reporting that REITs and REOCs do and opportunities to streamline, ISS, and the IAS leasing standard. The perspectives from a key securities regulator and a rating agency will also be examined.
Michael Brooks, Chief Executive Officer, Real Property Association of Canada
Mandy Abramsohn, Senior Vice President, Global Corporates Group, DBRS Limited
Simon Knowling, Partner, Head of REIT Practice, Torys LLP
Huston Loke, Director, Corporate Finance, Ontario Securities Commission
Mark Rothschild, Managing Director, Real Estate Analyst, Canaccord Genuity
Larry Toste, Partner, KPMG LLP
THE APARTMENT MARKET CONTINUES TO BE BUOYANT WITH SOLID RETURNS, SUSTAINABLE DEMAND, PURPOSE BUILT RENTAL: BUT ARE THERE CLOUDS ON THE HORIZON?
For many investors, the staple of any well-diversified real estate portfolio today is still the multi-family market. Predictable yields and strong cash flows make apartments one of the most reliable property classes. Investor demand far outweighs supply resulting in continued cap rate compression. What direction are they likely to take in 2018? How can investors make low cap rates work? How are occupancy rates in major markets across the country? How much new apartment construction is expected to continue in 2018? In which cities? What will be the impact of recent regulatory changes to rent control legislation in Ontario? Do niche markets still fuel some of this demand or are they maxed out, e.g. student housing, seniors housing? What challenges does the apartment market face over the next few years?
Derek Lobo, CEO & Broker of Record, SVN Canada Inc.
Todd Cook, President & CEO, Northview Apartment REIT
Brad Cutsey, President, Interrent REIT
Philip Fraser, President & CEO, Killam Apartment REIT
Michael Markidis, Vice President & Director, Real Estate, Desjardins Capital Markets
Greg Romundt, President & CEO, Centurion Apartment REIT
THE PRESSURES AND THE CONTINUED EVOLUTION OF THE RETAIL MARKET: ARE WE APPROACHING A PERIOD OF STRONG WINNERS AND WEAK LOSERS?
No other real estate property class has attracted as much attention as retail. We have watched Canadian, U.S. and European retailers opening stores, closing them or looking for fresh approaches to their formats. Given the turmoil in the U.S. retail market, is that likely to head North? There is a range of views on how online shopping is impacting the Canadian retail market. How do brick and mortar stores co-exist with online shopping? To what extent is Omni channel now a critical element of the retail landscape? How are all these trends reshaping the retail marketplace? Is the influx of inner city mixed-use and residential developments creating opportunities for new urban retail formats? How are regional malls performing vs. power centres vs. grocery anchored centres? What are national retailers doing to remain buoyant in this highly competitive market? Some analysts are offering dire forecasts for the future of older malls as changing demographics and buying habits negatively affect poorer quality properties. This session will examine these and other trends and discuss some of the facts and fallacies pertaining to the evolution of the Canadian retail real estate market.
Don Clow, President & CEO, Crombie REIT
Richard Michaeloff, Chief Executive Officer, OneREIT
Tim Sanderson, CEO Broker of Record, Northwest Atlantic
Ken Silver, President & CEO, CT REIT
Michael Zakuta, President & CEO, Plaza Retail REIT
THE KEY QUESTION ON THE MINDS OF LEADERSHIP AND INVESTORS: HOW WILL REITS and REOCS DELIVER PERFORMANCE OVER THE NEXT FEW YEARS?
An insightful examination of the challenges, trends, and issues facing Canadian REITs and REOCs, and what CEOs are doing to deliver strong performance and growth. The following are some of the questions that will be examined:
- How do you define good performance in 2017?
- What do you consider to be the greatest opportunities and risks to your business at this time?
- What are the three critical things that you need to do “right” in order to deliver unitholder value? For example, is it necessary to grow assets in order to be successful as a REIT?
- What are the most significant “disrupters” of real estate? How has your strategy/execution changed to address them?
- What does a REIT or REOC need to do to enhance unit holder value from your perspective?
- Can REITs grow effectively by pursuing ‘value-add’ and ‘opportunistic’ strategies?
- Is there a growing emphasis on value add? What kind of NAV growth are you headed for with this type of strategy?
- How are REITs responding to the strong urbanization forces across Canada? How much development activity is appropriate for REITs?
- What are the key steps that you are taking to grow your business? Are you playing defense or offense? What will be the major factors supporting growth for the remainder of 2017 and 2018?
- Are you rebalancing your portfolios and selling non-core assets?
- Do you think that more M&A will occur in the REIT/REOC market? What types of entities will be the most likely targets? Who will be the buyers?
Adam Paul, President & CEO, First Capital Realty Inc.
Brent Binions, President & CEO, Chartwell Retirement Residences
Michael Emory, President & CEO, Allied Properties REIT
Armin Martens, President & CEO, Artis REIT
Michael Smith, Managing Director, Global Equity Research, RBC Capital Markets
Blair Welch, Non-Independent Trustee, Slate Office REIT and Slate Retail REIT