British Columbia Pension Forum 2007 May 24, 2007
Shareholder Objectives Economic Long term rate of return comparable to blue chip investments Preferred tax exempt real estate development & investment vehicle for Canadian Pension Plans Preservation of capital is key Focus on cash flow and long term capital appreciation Social Quality built housing both for rent and for-sale Socially targeted initiatives Employment Union jobs in the construction industry Saddleback Hills, Kamloops 2
Business Plan Highlights Goal to double portfolio value to $1.2 billion + Diversified by product type and location Prefer new development where feasible Acquisition on carefully considered investment parameters Expand existing assured rental housing alliance with OMERS and Sun Life from $300M to $900M Expand seniors living community development 6 communities by 2010 Targeted condominium developments 3
Accomplishments To Date $30 million in dividends over last 5 years In excess of $1.5 billion in completed developments Constructed over 7,300 rental & condominium homes Income producing real estate exceeds 5.2 million square feet 14.8 million person-hours of employment Over $64.3 million in health & welfare and pension benefits Circa, Collingwood Village, Vancouver 4
Dividends Policy: Historically set at 30% of Net Income Last 5 years: ($000 s) Total Company 2002 2003 2004 2005 2006 3,049 3,134 5,150 6,410 12,327 5
$ Thousands Net Operating Income 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2002 2003 2004 2005 2006 2007 Forecast Current Actual 6
$ Thousands Revenue 275000 250000 225000 200000 175000 150000 125000 100000 75000 50000 25000 0 2002 2003 2004 2005 2006 Real Estate Sales Rental Other 7
$ Thousands Shareholders Equity 500,000 461,565 400,000 354,390 398,540 300,000 249,017 256,408 200,000 100,000 0 2002 2003 2004 2005 2006 Note: Forecasts and actuals does not reflect any appreciation in the value of assets 8
$ Thousands Assets 1,200,000 1,000,000 800,000 600,000 552,795 601,519 791,037 842,677 917,148 1,000,000 400,000 200,000 0 2002 2003 2004 2005 2006 2007 Note: Forecasts and actuals does not reflect any appreciation in the value of assets 9
Debt To Equity IPP Development Total 2002 0.82 0.30 1.12 2003 1.12 0.30 1.42 2004 0.96 0.18 1.14 2005 0.82 0.18 1.00 2006 0.81 0.03 0.84 10
Share Values 2003 2004 2005 2006 Appraisal Method $1.43 $1.51 $1.69 $2.17 Discounted Cashflow Method $1.91 $2.14 $2.44 $2.65 11
Returns Increase in Share Value 1 year 3 year 5 year Appraisal Method 29.8% 16.2% 12.3% Discounted Cash-flow Method 9.6% 12.5% 16.8% Note: net of all management expenses 12
Completed Developments - 2006 $200 million Toronto Jazz Victoria Astoria Victoria Belvedere Kamloops Saddleback Hills Phase I & II: Vancouver Urba Vancouver Circa 13
Industrial, Commercial & Retail Current Status: Portfolio 3,525,000 sq ft Balance By Type - Office & Retail - Industrial - Hotel 1,483,000 sq ft 1,897,000 sq ft 145,000 sq ft 42% 54% 4% 14
Balance By Location BY VALUE BY AREA ON 11% AB 4% ON 15% AB 10% BC 85% BC 75% 15
Income Producing Portfolio Leasing Status Residential Rental 99% Office/Retail 98% Industrial 100% 201 County Court, Brampton 16
Income Producing Residential Portfolio Residential Rental 2,345 suites Seniors Living 183 suites Future: Rental Seniors 300 suites over 500 suites Top: Serrano, Village Gate West, Etobicoke Bottom: The O Keefe, Vancouver 17
Current Income Producing Portfolio Activity Ontario Jazz in final leasing phase Village Gate West Serrano under construction & commenced leasing Seniors under construction Alberta Edmonton & Calgary acquisitions Village Gate West Phase II, Etobicoke 18
Future Income Producing Portfolio Activity Ontario OMERS / Sun Life alliance expansion Adidas expansion Brantford site British Columbia Harbourside, North Vancouver 3 buildings Heather & Ash Street 20+ acres of waterfront in south Vancouver Seniors at UBC Potential Acquisitions Continue to actively seek properties in a competitive market Heather & Ash Street, Vancouver 19
Market Outlook Rental Well located, transit-oriented, condo quality rental projects continue to out perform the market, as evidenced by Prelude & Jazz. Anticipate strong demand for future rental - Echo boomers, increasing job creation and inmigration, etc. Limited supply of new rentals. Aging existing rental stock. 20
Current Condominium Developments British Columbia Vancouver Tapestry Patina & YMCA Victoria Chelsea Chelsea, Victoria Richmond Emporio Patina & YMCA, Vancouver 21
Future Condominium Developments Top: 365 Waterfront, Victoria British Columbia Victoria - 365 Waterfront Kelowna beach front property Ontario Toronto Five Corners Huntington - 1900 Bayview Street Village Gate West Phase III Alberta Edmonton - Jasper Avenue Bottom: Five Corners, Toronto 22
Alberta Focus on the Future Focus on commercial income producing properties Acquisition & Development Currently have 7 properties Upcoming developments: High-end residential tower, Edmonton 152,000 square foot distribution facility, Edmonton Other projects planned in Calgary & Edmonton 4510 & 4610 76 th Avenue SE, Edmonton 23
Construction Market Overview Prevailing Factors: High volume of residential construction Shortage of skilled trades persons Competition for limited trade contractors Aging labour force coupled with few newcomers Current Conditions: Rising materials and labour costs Reduced productivities but increased supervision Construction schedules impacted Outlook 2007-2009: Increased volume of residential, commercial & infrastructure projects Continued shortages of skilled labour Greater competition for available trade contractors Continued escalation of construction costs and timelines 24
Addressing Skills Shortage Established a number of initiatives with BCIT In 10 years in excess of $863,800 contributed to BCIT programs through Concert initiatives Endowment Fund exceeds $425,000 Industry Partner Fund exceeds $392,661 25
Other Employment & Training Initiatives BladeRunners Partnership Program 1 st construction company to embrace program TradeWorks Training Society Supply our new home owner kits Victoria Youth Employment Program 26
Community Builder - Accomplishments Founded on principle of building high-quality affordable rental & for-sale homes Over 7,300 homes in 18 years 2,500 rental apartments Over $1.5 billion development projects completed or underway Income-producing real estate exceeds 5.2 million square feet Concert plays a key role as community builder 27
Economic Performance Share value increased by 16.8% annually over the last five years Five consecutive years of record net income Assets likely to exceed $1 billion by the end of 2007 28
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Thank you 30