Summer Update

I guess the world is not coming to an end, debt crisis averted at the last minute but still lots of volatility in the market place. Redev continues to chug along despite world conditions. Commercial real estate is in great demand as a lot of companies etc. are putting their money into the commercial real estate market. We have 2 projects under contract to be sold with a possible 2 more in the coming months. 105-th 58. Ave retail Centre is now over 75% sold so if you are interested please talk to your representative or call us at 1-888 668-7344 for more information. The end of the year will soon be upon us so remember The REIG pays 4 ways. 1) Quarterly cash distribution2)Tax deduction the first year (2011 tax year) 3)Equity build up as mortgage gets paid down and 4) Appreciation of the property

Howard Manley
Senior Vice President
Redev Properties Ltd.

Rising Demand For Retail Property

According to a new study by Reuters, global commercial real estate sales increased in the 2nd quarter of this year by 47% to $101 billion, putting us on track to pass $440 billion in 2011. Canada, of course, was one of the main beneficiaries of this direct investment in commercial real estate.

A continued migration in population to Canada’s western provinces and calls for immigration reform for temporary workers will continue to fuel business, and provide employers with access to quality talent. This influx is also further strengthening the residential housing market. This can be seen most prominently in Vancouver, where the metro area currently needs about 65,000 new rental properties a year to keep up with demand, but only 600 are being added. The Canadian Real Estate Association’s (CREA) chief economist, Gregory Klump, said ‘the Canadian housing sector remains on a solid footing” and that the current market factors “bode well for homes sales activity and prices going into the second half of 2011″. Of course, we all know that equity growth in the residential sector and homeowner confidence will only result in more spending at local shopping malls.

Another report from Reuters highlights this and quotes employers as being more confident than ever in adding jobs and expanding. It similarly points out solid growth across the board with retail sales up again and building permits on the rise, in addition to new jobs being added, creating a positive upward spiral in the economy.

However, what is really going to fuel increased returns and growth for those investing in retail properties is the continued rise in demand for retail space. Canadian shopping centers out perform American ones by 45% more sales per square foot at an average of $680. Some hot Canadian spots are pulling in as much as $1,200 per square foot, only surpassed by one location, the Forum Shops at Caesars Palace, Las Vegas.

The problem, at least for retailers, is the limited space and the resistance of local government to allow rezoning. Retailers like Ralph Lauren, Gap, Coach, Macy’s, Juicy Couture, and Crate & Barrel are battling for space, and are now fighting for prime locations in smaller communities with big populations. Large shopping malls often have no choice but to expand upwards if they want to add shopping areas, meaning closures and disturbing renovations, pushing consumers to frequent their local shopping plazas more often. This will be a trend that continues as many want to avoid the parking mazes and enjoy the personal touch at their own neighborhood shopping centers. When new construction does happen, it will boost commercial real estate sale prices and bring more traffic to small and mid-sized shopping centers too

The bottom line is, more demand means higher rents and better terms for landlords, resulting in higher returns and more valuable commercial investment properties.

Richard Crenian
President, Redev Properties Ltd.

Excerpt from Investments in Canada Blog

Alberta, Canada has been making a solid push to become a global economic force, with Calgary leading the charge as a powerful new world city. However, its true strength is just being discovered by the rest of the planet. So, how can you cash in on it?

For economists and investment experts, this should come as no surprise. The western province of Alberta not only boasts significant natural resources, most notably its oil, but it also enjoys a solid financial system and has long been preparing itself for this moment. Those who live in or who have invested in Alberta before, whether through opening their own business or through real estate investment, know that the province has a healthy and amicable attitude toward investment, as well as a commitment to solid and sustainable growth. The latter may have kept Alberta under the radar until now, but it is certainly paying off.

With a solid industrial foundation that supports the economy, a structured plan for growth, and attractive tax rates, it is obvious this run isn’t going to dwindle anytime soon. However, not many were prepared for this week’s news that really established this part of Canada as a force to be reckoned with. Who would have believed that this slice of the “Great White North,” with a population of just 3.7 million, would outperform the entire 50 United States and its 311 million residents?

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