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2014 Program

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Tuesday, September 9, 2014

7:15 a.m.

REGISTRATION & CONTINENTAL BREAKFAST

 



8:00 a.m.

WELCOME AND OPENING REMARKS

 
Ken Silver Michael Smith

Ken Silver, President & CEO, CT REIT
Michael Smith, Managing Director, Global Research, RBC Capital Markets

8:05 a.m.

OVERVIEW OF THE CANADIAN REIT MARKET: WHAT’S NEXT AFTER THE POST IPO PARTY HANGOVER?

 

While the Canadian REIT market had a stellar performance in 2012, the same could not be said for the past year. Notwithstanding the challenges that REITs faced in the second half of 2013, sixteen new IPOs still made it into the Index before the capital markets changed course. The opening presentation will provide a brief overview of what has transpired over the past 12 months, both positively and negatively, some initial performance results for the first half of 2014, and a few observations on where the market appears to be heading over the next year.

Carolyn Blair, Managing Director, RBC Capital Markets Real Estate Group

8:30 a.m.

THE BUYSIDE PERSPECTIVE: WHAT APPETITE DO INVESTORS HAVE FOR REITS AT THIS TIME? WHAT ARE THEIR MAJOR CRITERIA?

 

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 unit and REOC shares, and what are the key expectations that govern their investment decision-making.

  • With the REIT sector maturing, are you now focused on total return (income + appreciation) vs. purely income return? How do you expect to achieve portfolio growth?
  • With many REITs having not fully recovered from the sell-off of 2013 and still trading at a discount, what do you anticipate happening to unit values over the next twelve months?
  • How concerned are you about rising interest rates? When they finally go up, what implications will that have on your investments in Canadian REITs and REOCs?
  • How active should Canadian REITs be in developing domestically and buying foreign properties? If so, in which markets and why?
  • Is the quality of the assets held by most REITs generally satisfactory to you or do you have any concerns?
  • How does an investor determine who is a good operator? How important is that to you?
  • What is the right capital structure and appropriate level of debt for a Canadian REIT in your opinion?
  • What will the catalyst be to shift capital flows back toward REITs?
  • What do dedicated and non-dedicated REIT investors want?

Michael Smith Paul Curbo Ryan Fitzgerald Michael Missaghie Andrew Nasr

Moderator:
Michael Smith, Managing Director, Real Estate Research, RBC Capital Markets

Panel:
Paul Curbo,
Senior Director, Portfolio Manager, Invesco Real Estate
Ryan Fitzgerald, Vice President & Portfolio Manager, CI Investments Inc.
Michael Missaghie, Senior Portfolio Manager, Sentry Investments
Andrew Nasr, Managing Director, Investments & Senior Portfolio Manager, Middlefield Capital Corporation

9:30 a.m.

IS ACTIVISM THE “NEW M&A” IN CANADA? AN IN-DEPTH CONVERSATION

Shareholder activism has arrived in Canada. No companies, including REITs, are immune. Why has this activity increased in the last year or so? What issues or practices attract the attention of activists? So far, what REITs have been the subject of activists’ attention and why? How successful have activists been? What can REITs do to protect themselves from activists’ attention? What can and should a REIT do if it becomes a target? Is dealing with activists any different than typical defense preparedness? Are activists’ activities good or bad for fundamental investors in REITs? What is the view of the Securities Commissions on these activities? What’s in it for the activists to spend their time and money on these campaigns? Will activism replace fundamental/strategic investment as the primary focus of M&A practitioners? This session will start with a ten minute overview of this timely topic from one of Canada’s leading M&A investment bankers, followed by a lively panel discussion.

Peter Buzzi John Murphy Walied Soliman

Peter Buzzi, Managing Director & Co-Head, Mergers & Acquisitions, RBC Capital Markets
John Murphy, Vice President, Research Analyst, Cohen & Steers Capital Managment
Walied Soliman, Partner, Norton Rose Fulbright Canada LLP

10:10 a.m.

MORNING REFRESHMENTS

10:40 a.m.

ARE CANADIAN REITs EVOLVING INTO THE U.S. REIT MODEL? IF SO, WHAT IS CAUSING THIS TRANSITION?

 

With the Canadian REIT market having achieved its 20th anniversary last year, there may be somewhat of a shift occurring towards the U.S. model of REITs in which low leverage and low payout ratios are preferred. Strategic plans are also evolving. Some REITs are considered to be “value creators” and others are deemed to be “financial engineers”. Some are a “pure play” with a strong focus and competitive positioning while others are a “diversified play” with possibly more opportunities to grow more rapidly. Some have a mandate to build a real estate investment, development and operating platform while others operate with leaner platforms.

  • Is there now a more defined typical Canadian REIT model? How do new REITs compare with older ones?
  • What is the franchise value of a REIT? Are mainstream REITs getting higher values? Do they have the capability to grow their NAV per unit using capital allocation and corporate culture in a rising interest rate environment?
  • What are REITs doing to protect investors? How will growth be balanced with safety?
  • Will REITs take on more risk to offset interest rate increases?
  • How much development activity is appropriate for REITs? Under what circumstances?
  • Under what circumstances should REITs raise equity?
  • Where will acquisitions come from?
  • Should AFFO dilution be accepted if it results from de-levering?
  • What improvements have REITs made over the years in their operating platforms?
  • What else are REITs doing to support their unit price? Is this an appropriate time to buy back some units?
  • What are the three most important things that need to happen to ensure the continuing success of the Canadian REIT market?

Stephen Sender Ken Avalos Rags Davloor Tom Dicker Michael Emory

Moderator:
Stephen Sender,
Managing Director, Industry Head – Real Estate, Global Investment Banking, Scotiabank

Panel:
Ken Avalos,
Vice President & REIT Analyst, Raymond James
Rags Davloor, Executive Vice President & CFO, RioCan REIT
Tom Dicker, Portfolio Manager, Dynamic Funds
Michael Emory, President & CEO, Allied Properties REIT

11:40 a.m.

CONCURRENT SESSIONS (Select A1 or A2)

 

SESSION A1

THE EXPERIENCES OF REITs AS DEVELOPERS: HAVE THEY BEEN ABLE TO MOVE UP THE RISK CURVE SUCCESSFULLY?

A growing number of REITs are undertaking new developments as one of their growth strategies. On the one hand, the significant degree of cap rate compression and the lack of quality assets being available for sale make it difficult for a REIT to grow acquisitions only. On the other side, market trends and opportunities associated with government planning policies are very supportive of urbanization, intensification, and facilitating higher density forms of development. The economics of development are becoming compelling when compared with cap rates. This panel will examine these questions in some greater detail and how REITs can pursue development strategies successfully.

  • How does development relate to the need for a REIT to balance yield vs. creating deferred benefits?
  • How are investors, portfolio managers and analysts viewing REIT development strategies?
  • Are there practical issues that make it difficult for REITs to do so or not? If so, how can they be overcome?
  • Where are the cost parameters heading associated with respect to inner city land prices and construction costs? What impact are they having on development pro formas?
  • What is the ideal way for REITs to approach these opportunities?
  • What have been the experiences of REITs to-date with new developments?
  • With the growing number of new developments being undertaken by a wide range of investors, is a danger of over-supply of new product in some markets?
  • How much development is too much for a REIT?
  • Are the REITs well equipped to manage large development programs?

Colin Johnston Hugh Clark Todd Cook Adam Paul Michael Zakuta

Moderator:
Colin Johnston,
President, Research, Valuation & Advisory, Altus Group

To request a copy of the PowerPoint presentation, please email colin.johnston@altusgroup.com

Panel:
Hugh Clark,
Vice President, Development, Allied Properties REIT
Todd Cook, President & CEO, Northern Property REIT


Adam Paul, Executive Vice President, Investments & Leasing, CREIT
Michael Zakuta, President & CEO, Plaza Retail REIT

SESSION A2

THE REIT IPOs FROM 2013: WHAT WERE THEIR UNDERLYING STRATEGIES? HOW ARE THEY WORKING?

In 2012 and the first half of 2013, there was an unprecedented level of activity of proposed and actual IPOs of new Canadian REITs entering the market. Many local, modestly sized, externally managed REITs were created. Joining them have been a growing number of cross-border REITs created by owners of U.S. or European real estate assets, who are finding that their home capital market is not as welcoming as Canada’s. In a league of their own were two large retailers that monetized the hidden value of their properties assets via two large and very successful REIT IPOs. This session will examine the experiences of the smaller REIT IPOs, what their primary strategy was, and how it has unfolded. What are the underlying fundamentals supporting the case for these younger REITs in today’s investment environment? What are the challenges facing management and how are they addressing them? How can these new REITs grow and achieve greater mass? Is there investor “fatigue” because there are too many smaller REITs or a bias towards more established ones? Will M&A activity result from this?

Mark Edwards Scott Frederiksen Heather Kirk Robert Landin Darin Rayburn Brady Welch

Moderator:
Mark Edwards,
Managing Director & Head of Real Estate Investment Banking, Desjardins Securities Inc.

Panel:
Scott Frederiksen,
Chief Executive Officer, WPT Industrial REIT
Heather Kirk, Managing Director, Equity Research, BMO Capital Markets
Robert Landin, Chief Executive Officer, Milestone Apartments REIT
Darin Rayburn, Chief Executive Officer, Melcor REIT and Executive Vice President, Melcor Developments Ltd.
Brady Welch, Chief Financial Officer, Slate Retail REIT

12:35 p.m.

INFORMAL LUNCHEON

LUNCHEON REFRESHMENTS

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1:35 p.m.

CONCURRENT SESSIONS (SELECT B1, B2, or B3)

 

SESSION B1

THE CONTINUING EVOLUTION OF REIT MARKETS AROUND THE WORLD: WHAT ARE THE ISSUES AND THEIR PERFORMANCE?

Please note Session B1 will not be conducted live at RealREIT 2014. Videoed interviews of the panel will be sent to all attendees post-conference and also will be posted on The Real Estate Forums YouTube channel.

A qualitative review of global property and REIT markets, by a panel of industry association leaders. What are the local pressures on the REIT structure? How are governments supporting REITs? Are they tending to regulate very significantly or not? In what markets have REITs enjoyed their greatest success to-date? Which countries are contemplating a new REIT vehicle? What are the issues facing this global vehicle moving forward? How has the buy side responded? What structural REIT changes are afoot? Are some markets still experiencing the de-leveraging and right-sizing of balance sheets? What is being done in various regions to expand REIT advocacy?

Michael Brooks Philip Charls Shinsuke Imai Andrew Mihno
Liz Peace Koji Sawada Peter Verwer Steve Wechsler

Interviews with:
Peter Verwer,
Chief Executive Officer, Asia Pacific Real Estate Association Limited
Liz Peace,
Chief Executive Officer, British Property Federation
Philip Charls
, Chief Executive Officer, European Public Real Estate Association
Steven Wechsler, President & CEO, NAREIT
Andrew Mihno
, Executive Director, International & Capital Markets Division, Property Council of Australia
Shinsuke Imai
, Secretary General, The Association for Real Estate Securitization
Koji Sawada, Senior Researcher, The Association For Real Estate Securitization

Interviewed by:
Michael Brooks
, Chief Executive Officer, Real Property Association of Canada

SESSION B2

IN SEARCH OF CANADA’S BEST REITS: HOW ARE THEY ABLE TO MAXIMIZE VALUE?

An insightful discussion of the attributes of what makes a great Canadian REIT. The session will explore the quality of Canadian REITs and how their performance can be measured. What are the “best practices” that can facilitate a REIT’s ability to maximize its value? Issues discussed will include: the potential impact of legal structure; quality of assets; tenant quality; innovative and non-traditional asset classes; corporate sustainability; succession; governance; board renewal; disclosure/transparency; executive compensation; cost management; talent attraction; AFFO calculation; IFRS best practices; CAPEX disclosure; tenant relations; research analyst coverage; institutional ownership and participation; investment banking standards; debt structure: available sources, cost; capital allocation; ETF ownership; and liquidity. The panel will also examine the impact of the various enterprise and market risks on performance including how risk is best measured, managed and communicated.

Tom Rothfischer Rob Geremia Kevan Gorrie Armin Martens David Way

Moderator:
Tom Rothfischer,
Partner, GTA Real Estate Industry Leader, KPMG LLP

Panel:
Rob Geremia,
President, Boardwalk REIT
Kevan Gorrie, President & Co-CEO, Pure Industrial REIT
Armin Martens, President & CEO, Artis REIT
David Way, Research Analyst, Pyramis Global Advisors, A Fidelity Investments Company

SESSION B3

WHAT ARE THE MAJOR SOURCES OF CAPITAL FOR REITs AND REOCs?

Access to a supply of well-priced capital can be helpful to the growth of REITs, via acquisitions, development, or asset repositioning. This session will examine the current market conditions and environment for REITs to access the equity and debt markets to meet their ongoing needs. What are the major sources from which REITs can raise capital? Discussion will examine units/shares, preferreds, converts, mortgages, mortgage bonds, unsecured debentures and revolvers. How should REITs evaluate and create appropriate strategies on how and when to use these capital sources? Secured vs. unsecured markets: is there a different mix emerging? Why are we seeing more unsecured? 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? Under what circumstances should REITs consider buying their own units? Do the capital and investor markets favour larger real estate entities or do they simply want the existing ones to get bigger? What is the role of ETFs as buyers of REIT units? What happens if ETFs sell their positions?

Louis Forbes Anish Chopra Floriana Cipollone Scott Cryer Rael Diamond

Moderator:
Louis Forbes,
Chief Financial Officer, CT REIT

Panel:
Anish Chopra,
Managing Director & Portfolio Manager, TD Asset Management Inc.
Floriana Cipollone, Chief Financial Officer, Plaza Retail REIT
Scott Cryer, Chief Financial Officer, CAPREIT
Rael Diamond, Chief Financial Officer, CREIT

2:35 p.m.

CONCURRENT SESSIONS (SELECT C1, C2, or C3)

 

SESSION C1

GOING GLOBAL OR STAYING AT HOME? WHAT ARE THE KEY CONSIDERATIONS IN EXECUTING SUCH A STRATEGY?

Some REITs are increasingly buying foreign assets. The panel will examine the decision-making process that executives are exercising prior to moving into global markets. What are the most significant factors that need to be weighed carefully? 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?  What are global PMs looking for?  Do Canadian REITs meet their needs?  Where in the world do PMs need to go to find growth? 

Lori-Ann Beausoleil Chris Blanchard Jane Gavan Corrado Russo Stephen Taylor

Moderator:
Lori-Ann Beausoleil,
Partner, National Leader, Canadian Real Estate Advisory Practice, PwC

Panel:
Chris Blanchard
, Portfolio Manager, Global Real Estate Securities, Presima Inc.
Jane Gavan,
Chief Executive Officer, Dream Global REIT
Corrado Russo, Managing Director, Investments & Global Head of Securities, Timbercreek Asset Management
Tom Schwartz, President & CEO, CAPREIT
Stephen Taylor, President, HOOPP Realty Inc.

SESSION C2

UNDERSTANDING THE COMPETITIVE DIFFERENCE BETWEEN REITs, PRIVATE EQUITY FUNDS AND PENSION FUNDS AS INVESTORS: WHO HAS THE EDGE?

In 2014, the capital markets in Canada continued to demonstrate that investment real estate is still in favour. Given the challenges faced by other asset classes, real estate is generally outperforming many asset classes by offering investors steady and favourable yields at much higher levels than the fixed income market. A panel of senior executives from a cross-section of organizations will discuss some of their mandates and priorities for 2014. Prior to May, 2013, it appeared that REITs were the aggressors in successful asset acquisitions. But that appears to have dramatically changed in the past year. What are the differences between the issues faced by a REIT vs. a pension fund vs. a private equity fund in pricing properties and accessing investment capital at this time? Are pension funds able to focus on Class A assets while REITs focus on higher yielding opportunities? What are your respective priorities for the coming year? Which property classes will be most favoured, in which markets, and why? What have been the most significant challenges in order to buy or sell assets in this market? Are there any signposts that Canadian interest rates will finally rise in 2015? If they do, what will that mean for your strategies?

Amy Erixon Jason Castellan Michel Léonard Joe Mazzocco Paul Zemla

Moderator:
Amy Erixon,
Principal & Managing Director, Global Investment Management, Avison Young

Panel:
Jason Castellan,
Chief Executive Officer & Co-Founder, Skyline Group of Companies
Michel Léonard, President & CEO, BTB REIT
Joe Mazzocco, Partner, Investments, KingSett Capital
Paul Zemla, Chief Investment Officer, Bentall Kennedy (Canada) LP

 

SESSION C3

THE PRESSURES AND THE EVOLUTION OF THE RETAIL MARKET: HOW IS THIS AFFECTING CANADIAN REITs?

No other real estate property class has attracted as much curiosity and attention as the retail market across the country. It is also the asset class that comprises the largest portion of the Canadian REIT market. We keep hearing about the growing number of U.S. and European retailers circling Canada or announcing plans to open (or close) stores here. Coupled with this is the continued increase in internet shopping. Then there is the influx of mixed-use developments and inner city intensification. How are all these trends reshaping the retail marketplace? This session will examine the overall extent of this influx and its potential implications on existing retail centres and formats, current retail tenants, and REITs active in this property class. How are landlords and retailers responding to these new entries into our market? To what extent are new developments, retrofits and expansions one response? How are developers and retailers responding to the population surge in inner cities? As the high cost of land has resulted in a growing number of mixed-use projects and intensification activity, what kind of innovative urban retail formats and projects are emerging? At the same time, is there another elephant in the room? To what extent is internet shopping really growing? What impact is it having on conventional retailing especially with Generations Y and Z? What potentially lies ahead for retail market activity in Canada in 2013 and beyond? Have Canadian retailers been successful in taking advantage of attractive access to capital and creating single tenant REITs?

Tim Sanderson Don Clow John Morrison Mark Petrie Huw Thomas

Moderator:
Tim Sanderson,
Principal / Broker of Record, Northwest Atlantic (Canada) Inc.

Panel:
Don Clow,
President & CEO, Crombie REIT
John Morrison, President & CEO, Choice Properties REIT
Mark Petrie, Equity Research Analyst, CIBC World Markets
Huw Thomas,
President & CEO, Calloway REIT

3:35 p.m.

THE CONTINUED EVOLUTION OF REITs AND REOCs: MOVING FORWARD IN A LESS FROTHY ENVIRONMENT

 

An insightful examination of the challenges, trends, and issues facing Canadian REITs and REOCs, and what CEOs and senior investors are doing to recapture the strength that were experiencing prior to May, 2013. What are their growth strategies at this time and going forward? The following are some of the questions that will be examined:

  • Can REITs and REOCs recapture their performance of a year ago? What are the key steps that you are taking to do so? Are you playing defense or offense?
  • What were the primary reasons for the success of Canadian REITs? For their management? For investors? What emerging risks should they be most concerned about?
  • What is going to happen over the short and medium term especially once interest rates finally start to move? What will the cycle look like? What will be the prevailing cap rates of that time?
  • What will be the impetus for and the major factors supporting growth for the remainder of 2014 and 2015?
  • M&A activity: will there be more or less over the next few years? How likely will there be a consolidation of lenders and REITs on the horizon?
  • How are REITs responding to the strong urbanization forces across Canada? To what extent are they taking part in this city building trend? How much development activity is appropriate for REITs? How should it be funded?
  • What do REITs need to do individually, and as an asset class, to jump the concern about interest rate implications?
  • What are the three most significant things that you need to do “right” in order to deliver unitholder value? Is it necessary to grow assets in order to be successful as a REIT?
  • What are the advantages and disadvantages of investing in foreign assets? Is it worthwhile?
  • What is an optimal capital structure/payout ratio to minimize your cost of capital and maximize growth?
  • What are the most pressing governance issues facing public real estate entities right now?
  • What does a REIT of REOC need to do to enhance unit holder value from your perspective?
  • What do you consider to be the greatest opportunities and risks to your business at this time?

Ken Silver Brent Binions Michael Cooper Neil Downey David Henry Fred Waks

Moderator:
Ken Silver,
President & CEO, CT REIT

Panel:
Brent Binions,
President & CEO, Chartwell Retirement Residences
Michael Cooper, President & CEO, Dream Unlimited Corporation
Neil Downey, Managing Director, Global Equity Research, RBC Capital Markets
David Henry, President & CEO, Kimco Realty Corporation
Fred Waks, President & COO, RioCan REIT

4:35 p.m.

NETWORKING RECEPTION