Peter Cuthbert, Fiera Real Estate president and head of global real estate. (Courtesy Fiera)
Last year’s Canadian commercial real estate return was the worst since the recession of 1993, according to the 2020 MSCI/REALPAC Canada Property Index.
The total return plummeted from 6.68 per cent in 2019 to negative 4.12 per cent in 2020. Data has been collected since 1985, and the total average return since then has been 8.5 per cent, to put the numbers in perspective.
“Real estate suffered a down year,” MSCI executive director Simon Fairchild said during the virtual MSCI/REALPAC Canada Real Estate Investment Forum sponsored by Avison Young on Feb. 2.
Analysis
Although the United States has failed to sell the idea of leasing its airport terminals to the private sector over almost 25 years since the first airport privatisation programme was initiated, various events have made the public-private initiative (PPP OR P3) more popular with municipal owners.
Now the P3 is shifting into other areas of operation, with people movers and consolidated car rental facilities top of the list.
Based on some short articles by the Reason Foundation, this CAPA report examines various examples, including a groundbreaking financial deal in New York, and also where this movement might go next.
Summary
IFM, QIC go deeper into low carbon energy
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The Queensland Investment Corporation and IFM Investors have sunk hundreds of millions of dollars into district energy businesses in North America as funds compete harder for assets with low carbon emissions.
“Institutional capital has a deep desire to be ESG [environmental, social and corporate governance] favouring and to have a tilt towards getting to a net zero position,” QIC’s head of infrastructure, Ross Israel, told
The Australian Financial Review.
QIC’s head of infrastructure, Ross Israel.
Attila Csaszar
Both QIC’s and IFM’s infrastructure portfolios have shifted more towards sustainable energy after Canada’s Brookfield Infrastructure, which has owned North American district energy operator Enwave Energy since 2012, split the business up.
IFM rules out new thermal coal projects after $2.9b energy deal
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One of the country’s largest infrastructure investors has ruled out investing in any new thermal coal assets, after announcing a $C2.8 billion ($2.9 billion) acquisition of an energy-efficient heating operation in Canada.
IFM Investors, which manages $148 billion for Australian superannuation funds, announced plans on Wednesday to acquire a 50 per cent stake in Canadian heating and cooling operator Enwave in a joint venture with the Ontario Teachers’ Pension Plan Board.
IFM head of infrastructure Kyle Mangini says the $148 billion fund will not invest in new thermal coal projects.
The Brookfield logo is shown in Gatineau, Que., on September 1, 2020. THE CANADIAN PRESS/Adrian Wyld February 02, 2021 - 8:35 AM
TORONTO - Brookfield Infrastructure has signed deals totalling US$4.1 billion to sell Enwave, its North American district energy business.
The company says Ontario Teachersâ Pension Plan and Australian firm IFM Investors have agreed to buy Enwaveâs Canadian business.
Enwaveâs U.S. business is being sold to Australian investment manager QIC and U.S. firm Ullico.
Net proceeds to Brookfield Infrastructure are expected to be US$950 million.
Enwave, which provides heating and cooling for buildings from a central plant, was acquired by Brookfield Infrastructure in 2012 from the City of Toronto and Borealis, the infrastructure investment arm of the OMERS pension plan.