Stephen Johnson, President & CEO, CREIT

The Canadian REIT market has generally continued to outperform virtually all other asset classes with the S&P/TSX Capped REIT Index all-in return for 2012 being over 17%. The opening presentation will provide a brief overview of some of the key factors that have contributed to these conditions and results over the last 12 months, both positively and negatively, and some initial performance results for the Index for the first half of 2013. Given that 2013 is the 20th anniversary of the Canadian REIT market, this market’s evolution will be described as a foundation for the next panel.

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

A wide ranging discussion among leading industry veterans on how Canadian REITs have evolved over the past 20 years. They will also comment on:

• What were the key steps or events that enabled the REIT markets to develop in Canada?
• Why did it take so long for the REIT market to become “mainstream”?
• What do you wish had happened differently in “REIT world” over the last 20 years?
• How Canadian REIT strategies have evolved over time: pure play vs. diversified; external management vs. internalized; role of debt, accretion and development
• How do you define good performance for REITs? How should their quality be measured?
• Is the quality of assets among REITs better than the average private or institutional real estate portfolio?
• What is now the typical Canadian REIT model? How do new REITs compare with older ones?
• What are REITs doing to protect investors?
• What ongoing improvements have REITs made in their operating platforms?
• What key regulatory changes have occurred over the past 20 years? Are more expected?
• What are the three most important things that need to happen to ensure the continuing success of the Canadian REIT market? What do you foresee over the next 20 years?
  

Moderator:
Michael Brooks, Partner, Aird & Berlis LLP and former CEO, Real Property Association of Canada

Panel:
Patricia Koval, Partner, Torys LLP
Jeffrey Olin, President & CEO, Vision Capital Corporation
Tom Schwartz, President & CEO, CAPREIT
Edward Sonshine, Chief Executive Officer, RioCan REIT 
William Wong, Managing Director, RBC Capital Markets Real Estate Group

Milton Cooper, Executive Chairman of Kimco Realty Corporation (the first U.S. REIT in the modern era), provides some insights and exchanges views with Doug McGregor, Chairman and Co-CEO, RBC Capital Markets, on what the Canadian REIT market might expect over the next two decades based on what we can learn from the U.S. REIT market over the past 23 years.

The last eighteen months has seen an unprecedented level of activity of proposed and actual IPOs of new Canadian REITs entering the market. There have been many local, modestly sized, externally managed REITs 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. Another recent trend features large retailers, who own their stores, surfacing the hidden value of their property assets via REITs. This session will examine these trends from a variety of perspectives.

• Do we need more REIT IPOs? If so, what characteristics should they have, eg. internal vs. external management, diversification vs. pure play, foreign assets, scale, asset quality?
• If REIT proliferation continues, will it lead to larger REITs, orphan REITs or a bubble?
• Do the new IPOs offer the same quality, transparency, governance, and underwriting standards as older ones?
• Is there investor “fatigue” because there are too many smaller REITs?
• Are the new IPOs in the market with the objective of growing or are they just exiting their private portfolio? What is their strategy?
• Why list in the Canadian market vs. the U.S. exchanges?
• What are the pre-requisites for the successful launch of a REIT owning Canadian assets? How does this compare with a Canadian REIT that owns U.S. based properties?
• Does structure matter, eg. REIT, REOC, FAIT, ETF? What are the advantages and disadvantages of these structures for a REIT or REOC? For investors? For issuers? What are the implications for liquidity? Governance? Growth potential? Risk? Cost to run? Cost to issue? Cost to trade?

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

Panel:
Scott Frederiksen, Chief Executive Officer, WPT Industrial REIT
Dennis Mitchell, Executive Vice President & CIO, Sentry Investments
John Morrison, President & CEO, Choice Properties REITLorne Shillinger, Partner, KPMG LLP
Michael Smith, Managing Director, Real Estate Equity Research, Macquarie Capital Markets Canada Ltd.

Over the past few years, institutional investors and many lenders have continued to increase their allocations to commercial real estate, and retail investors have moved in as well to satisfy their search for some reasonable yield. This session will examine how REITs and REOCs are managing their balance sheets in this very competitive environment, and an understanding of the rising cost of capital and its impact on market conditions. The panel will also compare the pros and cons of private equity funds vs. REITs along with some of the key differences between pension fund real estate ownership and REITs. Among the questions that will be discussed:

• What are the principal results that an investor wants out of a REIT?
• How does an investor determine who is a good operator?
• Comparing REITs and pension funds: could accountability be one reason why REITs have a better cost of capital? What important is transparency?
• What are the pros and cons of a private equity fund vs. a REIT to an investor?
• What are the major differences between the investment strategies of pension funds and REITs?
• What is the right capital structure and appropriate level of debt for a Canadian REIT compared with a private equity fund? What are some examples of creative financing that REITs and RECOs have used to raise capital in this market?
• Is the buyside in today’s market focusing more on yield + growth rather than only yield?
• What is the franchise value of a REIT? Are mainstream REITs getting higher value? Do they have the capability to grow their NAV using sophisticated capital allocation and a strong corporate culture in a rising interest rate environment?

Moderator:
Sheila Botting, Senior Practice Partner, Client Cabinet & National Leader, Deloitte Real Estate

Panel:
Mario Barrafato, Chief Financial Officer, DREAM
Kevan Gorrie, President, Pure Industrial REIT
Heather Kirk, Managing Director, Equity Research, BMO Capital Markets
Corrado Russo, Managing Director, Investments & Global Head of Securities, Timbercreek Asset Management Inc.
Stephen Taylor, President & COO, Morguard

A growing number of REITs are considering or undertaking new developments as an appropriate strategic means for growth. 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?
• How does aging infrastructure affect your urban intensification plans?
• 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?

Moderator:
Paul Morassutti, Executive Vice President and Senior Managing Director, Valuation and Advisory, CBRE Limited

Panel:
Tom Burns, Executive Vice President & COO, Allied Properties REIT

Anish Chopra, Managing Director & Porfolio Manager, TD Asset Management Inc.
Glenn Hynes, CFO & Secretary, Crombie REIT
Andrew Melton, Chair of the Board, Melcor REIT
Mario Saric, Director, Real Estate & REITs, Scotiabank

An insightful presentation on the fundamentals that are driving the Canadian economy. What is the outlook for employment and population growth, inflation, interest rates, and commodity prices? What sectors in particular are driving job creation? What should we be watching for? What geo-economic trends and macro risks also require monitoring? What current issues are facing European markets, the United States and other tier one countries and emerging markets? What lies ahead for the remainder of this year and eventually for 2014? Is the U.S. economy back from its anemic state? What implications will these trends have on the Canadian economy?

Using a wireless survey, the audience will be polled for their predictions prior to the presentation. You will have an opportunity to compare your thinking with the expert’s views.

To view wireless survey results, please click here.

Speaker:
Craig Wright, Senior Vice President & Chief Economist, Royal Bank of Canada

How strong is the case for investing in publicly listed real estate at this time? How extensive is the shortage of yield in today’s investment market? In light of the challenges faced by other asset classes, is real estate still offering investors steady and favourable yields or are rising bond yields softening the market? This session will examine these and other questions in-depth. Some Canadian vs. U.S. market perspectives will be addressed.

• How much capital needs to be deployed given all the funds trying to enter the real estate markets? Where is all the capital that has been heading into REITs coming from?
• For some global investors, Canada is seen as a low risk/low return market. Better opportunities lie in Japan, Australia, Singapore and some other countries. What will this mean going forward?
• How does securitized real estate stack up against other investment options with respect to raising equity or debt at this time?
• Secured vs. non-secured markets: is there a different mix emerging? Are we seeing more non-secured? Is the pricing disconnect sustainable?
• What major priorities are used to evaluate public real estate companies in this market environment, e.g. balance sheet strength, liquidity, distribution coverage?
• Do the capital and investor markets favour larger real estate entities or do they simply want the existing ones to get bigger? Are micro-caps dead?
• What is the role of ETFs as buyers of REITs? What happens if they sell off their positions?
• Should diversification be provided by individual REITs/REOCs or by investor’s portfolio management?
• What would cause you to shift away from REITs and REOCs? If away, into what?

Moderator:
David Weinberger, Partner, Stikeman Elliott LLP

Panel:
Rags Davloor, Executive Vice President & CFO, RioCan REIT
Ryan Fitzgerald, Vice President, Portfolio Management & Portfolio Manager, CI Investments Inc.
Andrew Moffs, President and Portfolio Manager, SRE Securities Canada Inc.
Vlad Volodarski, Chief Financial Officer, Chartwell Retirement Residences

The pricing of office, industrial, retail and multi-unit residential assets across Canada have generally reached record high levels. Cap rate compression has continued to unabated across all property classes. A panel discussion examine what are some of the most significant challenges, risks and opportunities that a REIT senior executive is facing in managing assets in these market conditions and making the ultimate decision of whether to buy, to sell or to pursue development as a viable investment alternative. Among the questions that will be examined:

• Where are cap rates heading? Have they peaked in light of rising bond yields? Do valuations and fundamentals still make sense? Given pricing and availability of product, is this a time to be a seller or a buyer?
• What are the biggest value determinants in various markets now? How is the “value-added” measured? Is AFFO per unit and NAV per unit growth more important than asset growth?
• How do evaluate internal growth opportunities (rental growth; cash flow growth; occupancy growth) vs. external growth (accretive buying, development)?
• What can a REIT do to deliver organic growth and manage costs effectively?
• How does all this relate to a REIT’s need to balance yield vs. creating deferred benefits?
• What are the pros and cons for REITs to undertake development activity?
• How can you play the secondary markets? Could they offer better opportunities on a risk adjusted basis?
• Is there a housing bubble in Canada? Will this really matter to REITs?

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

To inquire about obtaining a copy of Colin Johnston’s PowerPoint, please click here.

Panel:
Roberto Geremia, President, Boardwalk REIT
Tom Heslip, Chief Executive Officer, Granite REIT
Armin Martens, President & CEO, Artis REIT
Peter Riggin, Chief Executive Officer, NorthWest Healthcare Properties REIT

Canadian REITs are buying foreign assets; foreign issuers are becoming Canadian REITs; Canadian investors can buy “best in class” REITs or ETFs from various countries. The panel will examine what are the “Best Practices” from around the world. The session will open with a brief overview comparing the size and performance of various global REIT markets to Canada’s.

• Are Canadian REITs well equipped to acquire and operate foreign asset? What are the implications of such a strategy from the perspective of taxes, distance 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?
• Are Canadian REITs practical vehicles for investing in foreign properties?
• 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?Why has foreign ownership of Canadian REITs dropped?
• What are the “best practices” among REITs around the world for: legal structure; quality of assets; tenant quality; innovative and non-traditional asset classes; corporate sustainability; disclosure; governance; disclosure/transparency; executive compensation; cost management; AFFO calculation; IFRS best practices; CAPEX reserves; tenant relations; research analyst coverage; institutional ownership and participation; investment banking standards; debt structure: available sources, cost; capital allocation; ETF ownership; and liquidity.

Moderator:
Christopher Potter, Partner, PricewaterhouseCoopers LLP

Panel:
Ken Avalos, Vice President, REIT Analyst, Raymond James Ltd.
Chris Blanchard, Portfolio Manager, Emerging Markets, Presima Inc.
Tom Dicker, Portfolio Manager, GCICL/Dynamic Funds Ltd.
Jane Gavan, Chief Executive Officer, Dundee International REIT
Robert Landin, Chief Executive Officer, Milestone Apartments REIT

An insightful examination of the challenges, trends, and issues facing Canadian REITs and REOCs, and what CEOs and senior investors are doing to prepare for the unknown horizon. What will the next twenty years look like? The following are some of the questions that will be examined:

• Is the good performance of REITs and REOCs sustainable? Are they currently priced for perfection?
• Why have Canadian REITs been so successful? For their management? For investors? What emerging risks should they be most concerned about?
• What is going to happen over the next 20 years? What will the cycle look like? What will be the prevailing cap rates of that time? Will REITs be playing defense? Who will be the buyers? Where will interest rates be?
• What will be the impetus for and the major factors supporting growth for the remainder of 2013 and 2014?
• 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? Are they going to be part this city building trend? How much development activity is appropriate for REITs? How should it be funded?
• Will Canadian retailers be successful in taking advantage of attractive access to capital and creating REITs?
• Why do Canadian REIT prices move in tandem from all REITs are not the same?
• What do REITs need to do individually, and as an asset class, to avoid having an accident?
• 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?

Moderator:
Stephen Johnson, President & CEO, CREIT

Panel:
Neil Downey, Managing Director, Global Equity Research, RBC Capital Markets 
Michael Emory, President & CEO, Allied Properties REIT
David Henry, President & CEO, Kimco Realty Corporation 
Andy McCulloch, Managing Director, Green Street Advisors
Dori Segal, President & CEO, First Capital Realty Inc.