Greystone dials in
A partnership of domestic institutional investors represented by Regina-based Greystone Managed Investments Inc. is the new owner of Telus Garden, which sold August 8.
The purchase price has yet to be disclosed. Telus Corp., which partnered with Westbank Corp. on the mixed-use development, expects to reap proceeds of approximately $170 million from the sale.
Those proceeds will be funnelled to what Telus described in a note to BIV last week as “crucial social purpose initiatives.”
“The distinct purpose behind the sale is that we can take our gain and reinvest it in the creation of a sustainable funding model in support of our crucial social purpose initiatives,” it said. “We look forward to sharing more information regarding this inspiring philanthropic initiative in the months to come.”
In the meantime, Greystone itself is the target of a purchase. On July 11, TD Bank Group announced an agreement to pay $792 million for Greystone’s parent company, Greystone Capital Management Inc. Pending regulatory approval, the new firm will be known as TD Greystone Asset Management.
Economic impacts
Real estate (construction as well as sales and leasing) is often cited as the biggest component of the B.C. economy, with Statistics Canada estimating its share at 26.8 per cent last year. This was on par with 2016, despite the cooling effects of a heightened property transfer tax on foreign purchases of residential real estate in Metro Vancouver.
Now, with details pending of further measures to cool foreign and speculative participation in B.C. real estate markets, a CoStar Group Inc. report underscores the impact policies aimed at cooling the local real estate market are having.
Year-over-year employment figures show relatively strong 2 per cent growth for Vancouver, but CoStar points out that employment declined 1.9 per cent in the second quarter of 2018 versus the first.
“Much of this weakness is due to the slowdown in the real estate markets,” the report states.
Overall, employment growth is expected to slow this year to just 1.2 per cent, combining with high living costs to dissuade new arrivals from making a move to the city (now ranked second most livable in Canada, after Calgary, according to the Economist Intelligence Unit).
Canada Mortgage and Housing Corp. (CMHC) reports that housing starts stood at 2,157 in July, down 10 per cent from a year earlier. While starts year-to-date for Metro Vancouver total 14,719, up 0.3 per cent from last year, starts are on a slower growth track than initially expected. Annual starts have steadily dropped in recent months, and CMHC now estimates them at 24,141 for the year in Metro Vancouver if current patterns continue.
Renovation spending
The high cost of housing continues to prompt B.C. residents to consider renovations, with Altus Group indicating that B.C. remains “the growth leader” for renovation spending.
Renovation spending increased 4.7 per cent in B.C. last year to total $9.9 billion, or 12.7 per cent of the $77.7 billion total spent in Canada. B.C. residents will boost spending this year by 5.3 per cent, pushing renovation spending to $10.4 billion.
Digging into its data sources, Altus said that renovations aren’t being driven by homeowners seeking to stay put rather than spend on a new home. Rather, the spending seems designed to spruce up older properties, prepare existing ones for sale or prepare new homes for occupancy.
Meanwhile, a Canadian Imperial Bank of Commerce survey this spring found that budgets are smaller than in the past.
While more B.C. residents planned to renovate their homes this year (39 per cent, up from 32 per cent two years ago) the average project stood at $9,900 versus $13,200 last year and $15,522 two years ago. Consistent with Altus’ findings, property maintenance accounts for the largest proportion of renovations at 52 per cent of projects.
