Real Estate Weekly Newsletter (from KPMG)

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Thank you to KPMG for the following:

The following information was obtained from newspaper articles appearing in the Globe and Mail and the National Post for the week ending December 3, 2006:

Ivanhoe Cambridge will purchase a 93% stake in the Arcaden mall in Dusseldorf,
Germany, for $249.3-million. The mall is scheduled to open in 2008.
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FirstService Corp. has purchased a majority interest in PGP Valuation Inc., a San Diegobased
commercial real estate appraisal and consulting firm. FirstService will rebrand its
Colliers CMN appraisal business in the U.S. as PGP Valuation.
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According to CB Richard Ellis Ltd., Canadian companies and pension funds have invested
nearly $10-billion in foreign real estate in 2006, about twice the amount invested in 2005. At
the same time, foreign investors have purchased between $5-billion and $6-billion in
Canadian commercial properties in the past 12 months. In 2006, the total value of
commercial real estate transactions in Canada is expected to reach about $23-billion.
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Developers expect substantial building opportunities to arise as the federal government
reorganizes its office space in Ottawa. The federal government’s Public Works department
expects to renew about 3.4 million square feet of space and replace about 861,113 square
feet of office space over the next three years. Also, BMO Nesbitt Burns and the real estate
division of RBC Dominion Securities are expected to release a report in December
recommending solutions for 40 government-owned buildings across Canada that are
underutilized, outdated or fail to comply with new environmental standards. Eighteen of
these buildings are located in Ottawa and comprise about 10.3 million square feet of office
space.
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According to Cushman & Wakefield LePage, class A and B office vacancy rates in Kanata,
Ontario, have fallen to 8% from 28.3% at the end of 2003.
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According to Statistics Canada, new housing construction in Canada dropped 3.3% in the
third quarter and investment in residential structures fell 2.2%, or 8.2% at annual rates.
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Canada Mortgage and Housing Corp. signed a memorandum of understanding with the
Federal Agency of the Russian Federation for Construction and Housing and
Municipal Services to promote the export of Canadian housing products and expertise.
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According to the Canadian Institute of Mortgage Brokers and Lenders, the total
outstanding mortgage debt in Canada is expected to reach $730-billion by the end of 2006
and more than $800-billion by the end of 2007. In 2006, $197.7-billion in new mortgages will
be completed, with approvals projected to exceed $200-billion in 2007.
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According to LaSalle Investment Management, global real estate funds raised a record
US$55-billion in 2006.
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According to the Lower Manhattan Construction Command Center, about 50 Lower
Manhattan projects, costing US$20-billion, are planned or currently underway. These include
the Ground Zero construction, a new US$2-billion, 43-storey headquarters for Goldman
Sachs Group Inc., and new underground water pipes, subway stations, parks and
residential buildings.
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Toll Brothers Inc. reported that orders for new homes fell 58% in the third quarter.
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According to the U.S. Commerce Department, sales of new homes fell 3.2% in October
from September, increasing the supply to seven months’ worth of new homes. Sales in
October were down 25.4% from a year ago. Investment in housing in the third quarter
dropped 18% during the third quarter. Overall construction spending dropped 1% in October.
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According to the National Association of Realtors, new-home sales in the U.S. are
expected to fall 17.3% in 2006 to 1.06 million.
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According to the National Association of Realtors, sales of existing homes in the U.S.
increased 0.5% in October from September to a seasonally adjusted annual rate of 6.24
million, but fell 11.5% from October, 2005. The median selling price dropped 3.5% from a
year earlier.
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Donald Trump is proposing to build a golf resort on a 566-hectare site near Aberdeen in
Scotland that will cost up to £1-billion ($2.2-billion). Plans call for a golf academy, two golf
courses, nearly 1,000 holiday homes, 36 luxury villas and a 450-bedroom luxury hotel.
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State-run Qatari Diar Real Estate & Investment Co. is reportedly in talks with Britain’s
Ministry of Defense to purchase London’s Chelsea Barracks. In October, Westminster City
Council approved plans to demolish the tower blocks to allow for 1,500 homes, shops and
offices on the 13-acre property in the heart of London.
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According to the Dutch Housing Ministry, there are almost 150 people seeking housing for
every 100 houses offered for rent in Amsterdam.
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OAO Gazprom plans to build a 300-metre-high skyscraper in St. Petersburg’s historic
centre. The project, called “Gazprom City,” is encountering opposition from cultural leaders.
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Dubai Property Ring is developing a US$109-million, 30-storey, 80,000-ton rotating
condominium tower, called Time Residences, in Dubai which is scheduled for completion in
2009.
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Aldar Properties will begin construction of a US$40-billion island, known as Yas, off the
coast of Abu Dubai in 2007 that will feature a leisure complex including a Ferrari theme park.
The island will be completed in 2014.
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According to JPMorgan Australia, foreign investment accounts for about 40% of all real
estate held through the Australian public markets due to limited product available in
Australia.
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According to the Sydney Morning Herald, housing prices in Australia climbed 2.2% in the
September quarter and increased 9.5% from September, 2005. Prices rose 10.1% in Perth
in the quarter and 45.9% annually. For the September quarter, prices were up 3.1% in
Darwin, 3.8% in Canberra, 0.6% in Adelaide, 1.5% in Hobart, 1.7% in Melbourne, 0.9% in
Brisbane and 0.2% in Sydney. On an annual basis, prices climbed 17.3% in Darwin, 10.5%
in Canberra, 6.4% in Adelaide, 9.4% in Hobart, 7.5% in Melbourne, 6.5% in Brisbane and
1.4% in Sydney.
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