Commercial Real Estate OutlookCommercial Real Estate Outlook

Canadian Market OverviewCanadian Market Overview

Unprecedented time in the commercial real estate market – record low cap rates and premium pricing

Lowest commercial mortgage rates in history.

Record low interest rates. fluctuating stock markets. low risk perception and solid yields have attracted investors to real estate.

Ample available capital across all buyer profiles.

The Capital Markets in PerspectiveThe Capital Markets in PerspectiveSales Volume Increasing in the USSales Volume Increasing in the US

Year over Year Sales Volume up 62%

2003 2004 2005 % Change2004 -2005

Office $46.1B $72.3B $112.0B 54%

Retail $29.3B $38.0B $48.7B 28%

Industrial $14.4B $20.1B $38.9B 94%

Multi-Housing $29.5B $48.1B $89.3B 86%

Total $119 .3B $178 .5B $288 .9B 62%

Source: Real Capital Analytics

The Capital Markets in PerspectiveThe Capital Markets in PerspectiveSales Volume also Increasing in CanadaSales Volume also Increasing in Canada

Year over Year Sales Volume up 14%

2003 2004 2005 % Change 2004-2005

Office $2.6B $4.1B $4.8B 18%

26%

10%

1%

14%

Industrial $2.3B $3.2B $4.0B

Retail $2.6B $3.6B $4.0B

Multi-Residential $1.9B $2.8B $2.9B

Total $9.6B $13.7B $15.7B

Source: CB Richard Ellis / Real Net

The Capital Markets in PerspectiveThe Capital Markets in PerspectiveSales Volume up in VancouverSales Volume up in VancouverYear over Year Sales Volume up 3%

2003 2004 2005 % Change 2004-2005

Office $0.34B $0.39B $0.44B 13%

-5%

-7%

30%

3%

Industrial $0.42B $0.58B $0.55B

Retail $0.60B $0.89B $0.83B

Multi-Residential $0.40B $0.46B $0.60B

Total $1.77B $2.33B $2.41B

Source: CB Richard Ellis / Real Net

Canadian Debt MarketCanadian Debt Market

Source: Bank of Canada and CB Finance

Weekly Benchmark Bond Yields & Mortgage RatesApril 1995 – April 2006

3

4

5

6

7

8

9

10

11

12

Perc

enta

geCommercial Mortgage Rates (5 year)

Gov’t of Canada 5-year Benchmark Bond Yield (April 12, 2006)

5.40%

4.32%

Canadian Market OverviewCanadian Market Overview

Current low inventory of available investment product in Canada

Cap rates continue to compress for “A” and “B”quality assets

All buyer profiles active in the market including:

• REIT’s.

• pension funds.

• private buyers.

• syndicators.

• foreign investors

Langley PowerMarch 2003CCap Rate:8.80%

Retail Cap Rates Retail Cap Rates –– Downward TrendDownward TrendPower Power CentresCentres

West Oaks Shopping CentreJune 2004Cap Rate: 7.67%

Canadian Tire / Future ShopAugust 2005CCap Rate:6.40%

Sweden WayMay 2005Cap Rate: 7.02%

Office Cap Rates Office Cap Rates –– Downward TrendDownward TrendMulti Tenant OfficeMulti Tenant Office1100 Melville Street. Vancouver

March 2003Cap Rate: 8.25%

1166 West Pender. VancouverJanuary 2004Cap Rate: 7.25% Oceanic Plaza. Vancouver

June 2005Cap Rate: 6.41%

847-865 Hornby Street. VancouverJuly 2002Cap Rate: 8.70%

10025 River Way, DeltaJuly 2003Cap Rate: 9.10%

Industrial Cap Rates Industrial Cap Rates –– Downward TrendDownward Trend12111 Jacombs Way, RichmondMarch 2004Cap Rate: 7.80%

1440 Derwent Way, DeltaAugust 2005Cap Rate: 6.25%

6700 Southridge Drive, BurnabyApril 2005Cap Rate: 6.67%

Why Vancouver?Why Vancouver?

A Strong. Diverse Economy

Gateway to Pacific Rim - China

Strong Population Growth. Unprecedented Housing Growth

Limited Speculative Development

Limited Land Supply

Strong Leasing Demand & Historical Low Vacancy in all

Sectors

2010 Olympics& Capital Projects

Vancouver Commercial VacancyVancouver Commercial Vacancy

2003 2004 2005 2006F

Greater Vancouver Reta il 5.3% 3.8% 2.9% 2.2%

Downtown Office 13.3% 11.2% 7.8% 5.8%

Greater Vancouver Industria l 3.3% 2.6% 1.6% 1.8%

*Retail vacancy rate based on grocery-anchored retail centres over 50,000 SF

Unemployment RatesUnemployment Rates

4

6

8

10

'98 '99 '00 '01 '02 '03 '04 '05 F '06

F '07

F '08

Une

mpl

oym

ent (

%)

BC Canada Vancouver

6.8%

6.0%

6.1%

2005

Source: Conference Board of Canada