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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
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.
Michael Smith, Managing Director, Real Estate Research, RBC Capital Markets
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
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, 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
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.
Stephen Sender, Managing Director, Industry Head – Real Estate, Global Investment Banking, Scotiabank
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
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.
Colin Johnston, President, Research, Valuation & Advisory, Altus Group
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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
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, Managing Director & Head of Real Estate Investment Banking, Desjardins Securities Inc.
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
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?
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
Michael Brooks, Chief Executive Officer, Real Property Association of Canada
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, Partner, GTA Real Estate Industry Leader, KPMG LLP
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
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, Chief Financial Officer, CT REIT
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
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, Partner, National Leader, Canadian Real Estate Advisory Practice, PwC
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.
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, Principal & Managing Director, Global Investment Management, Avison Young
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
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, Principal / Broker of Record, Northwest Atlantic (Canada) Inc.
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
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:
Ken Silver, President & CEO, CT REIT
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