KPMG Weekly Newsletter

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Thanks to KPMG for the Following:

December 11, 2006

The following information was obtained from newspaper articles appearing in the Globe and Mail and the National Post for the week ending December 10, 2006:

Cominar REIT will purchase Alexis Nihon REIT in a $440-million transaction. Cominar will pay $17 a unit and Alexis Nihon unitholders have the option of receiving cash or 0.77 of a Cominar unit for every Alexis Nihon unit held. The merged company will be called Cominar
Nihon REIT. Paul Massicotte resigned as CEO of Alexis Nihon and Robert Nihon has been named executive chairman.
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Morguard REIT will purchase three Ottawa office towers and land for $210-million in a joint transaction with a pension fund, reportedly the Hospitals of Ontario Pension Plan. The land has density approval to build an additional office building of 339,000 to 390,000 square feet. The seller is reportedly Northam Realty Advisers, which represents German
investors. The office buildings are 99% leased, with most of the space filled by government tenants.
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King & Benton Development Corp. is proposing to build a $500-million commercial and industrial mega-complex on a 427-acre parcel of land at Highway 403 and Oak Park Road in Brantford, Ontario. The development calls for 4.7 million square feet of industrial buildings, an 800,000-square-foot commercial component containing several big-box stores and offices, a hotel and a shopping village.
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Primaris Retail REIT will issue $100.44-million worth of units at $18.60 each, with an overallotment option for underwriters of up to 540,000 units. Proceeds will be used to repay debt and to fund acquisitions and redevelopment projects at its existing malls. Primaris will also increase its distribution to unitholders to $1.18 per unit on an annualized basis
beginning in January, 2007.
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Construction of Toronto’s Trump International Hotel and Tower is expected to begin in the summer of 2007 and the development will be completed in 2010. About 70% of the suites have reportedly been sold.
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According to Statistics Canada, the value of building permits rose 6.1% to $6.03-billion in October from September. Non-residential permits climbed 9.1% to a record $2.4-billion, spurred by a gain of 35.6% in the commercial sector. Residential permits increased 4.3% with single-family permits down 1.7%.
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According to the Canadian Construction Association, non-residential building is expected to rise 7.2% in 2006, 3.25% in 2007, 2.2% in 2008 and 1.2% in 2009, compared with a 7.4% gain in 2005. Combined residential and non-residential investment activity is projected to
increase 3.4% in 2006 and 1.7% in 2007.
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According to Canada Mortgage and Housing Corp., housing starts increased less than 1% in November to 225,000 units annually from 223,200 units in October on a seasonally adjusted basis. Urban multiple starts rose 5.7% in November from October, while single family starts fell 4.2%. Urban starts climbed 21.4% in the Atlantic region and 26% in the
Prairie region, while urban starts were down 11.7% in Quebec and 7.8% in British Columbia.
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According to RealNet Data Services, the average cost of a high-rise condo suite in the GTA increased 11.5% to $350 a square foot in September, 2006, from September, 2005. In Vancouver, the average cost is more than $500 a square foot. Unsold units across the GTA increased to 12,433 suites in September from 11,808 in 2005. Sales between January and September, 2006, rose to 13,804 units from 13,388 in the same period in 2005.
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According to the Toronto Real Estate Board, sales of existing homes fell to 6,281 units in November from 6,646 in November 2005. Sales are expected to reach 80,000 units in 2006. The average price dropped to $355,727 from $356,423 in October, but was up 4% from $341,177 in November, 2005. Over the past year, sales of existing condos in the
Scarborough Town Centre area rose 30%, semi-detached homes in York South climbed 53% and detached homes sold in Richmond Hill increased 29%. Total sales in 2006 are expected to drop 1.5% from the record pace in 2005.
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According to the Realtors Association of Hamilton-Burlington, 972 homes sold in November, including 210 condo units. The average price increased 5% to $251,164 and the average condo resale price was $197,970. New listings are up 8% to 1,345. Unit sales are down 2% for the first 11 months of 2006, compared with the same period in 2005.
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SL Green Realty Corp. has made an offer worth about US$4-billion, or about US$45.70 a share, for Reckson Associates Realty Corp. Financier Carl Icahn’s American Real Estate Partners LP ended his bid for Reckson, after two partners dropped out and investors didn’t accept a revised offer that included less cash.
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Station Casinos Inc.’s management and Colony Capital LLC have offered to take the Las Vegas casino company private for US$4.7-billion, with a bid of US$82 a share.
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Seminole Gaming will purchase Hard Rock International Inc. from Rank Organisation PLC of Britain in a US$965-million transaction. The acquisition includes 124 Hard Rock Cafes, two Hard Rock Casino Hotels, four Hard Rock Hotels, plus rock venues and rock memorabilia. Excluded from the deal is the Hard Rock Casino in Las Vegas. Seminole
Gaming plans to expand its hotel and casino operations in the U.S. and internationally.
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Robotic Parking Systems is in talks to build automated parking garages at 30 sites in the New York City area. The parking spaces in automated garages cost about US$40,000 each to build, compared with US$30,000 for a space in a typical underground parking lot.
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Melco PBL Entertainment Ltd. has filed a preliminary prospectus with the SEC, indicating that it plans to sell 53 million American depositary shares, or 14% of its company, through an IPO on the Nasdaq. Gross proceeds could be as much as US$954-million. Melco PBL is a joint venture between Hong Kong’s Melco International Development Ltd. and Australia’s Publishing & Broadcasting Ltd. that focuses on the gaming industry in Macau.
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According to Bloomberg, more than US$26-billion in proposed U.S. casino deals have been announced in 2006, exceeding the combined total for the previous six years.
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According to the U.S.-based National Association of Realtors, an index of signed purchase agreements fell 1.7% in October from September. Pending sales were down 13.2% from October, 2005.
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IVG Immobilien AG will reportedly pay nearly £600-million ($1.35-billion) to purchase the landmark London office building, known as the Gherkin, from Swiss Reinsurance Co, according to The Sunday Times.
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Dubai-based Limitless LLC plans to build a new Russian city on 17,800 hectares near Moscow. An US$11-billion investment in the Great Domodedovo project will be made in partnership with Russia-based Coalco Corp. Construction on the first 150,000 residential units, along with some commercial space, is scheduled to begin late in 2007.
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The Dubai government investment agency Istithmar reportedly purchased the Shell-Mex building on The Strand in London for nearly £520-million ($1.1billion), according to Property Week magazine.
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