CBRE - Canadian Real Estate Overview

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CANADIAN INDUSTRIAL REAL ESTATEOVERVIEWMAY 4, 2021Prepared for:

AGENDA1 MACRO TRENDS2 INVESTMENT ACTIVITY3 CURRENT FUNDAMENTALS4 SECTOR OUTLOOK

1 MACRO TRENDS

CANADA 2 MONTHS BEHIND UK & SEEING 3RD WAVEGLOBAL COVID-19 DASHBOARDNew COVID-19 Cases per million capitaGlobal Vaccination Progress (At Least 1 Dose)Percentage of Population 0%700600United nited States2001000Mar-20 May-20 Jul-20Singapore23.9%20%10%Australia8.3%United KingdomSep-20 Nov-20 Jan-21 Mar-217-Day Rolling Average Daily New COVID-19 Cases per Million CapitaSource: CBRE Research, World Health Organization, Oxford Economics, April 30th, ata as of April 29th, 2021.Source: Google, Oxford Economics, CBRE Research, 2021.Apr-21

CANADA REMAINS ATTRACTIVE ON THE GLOBAL STAGEKEY ECONOMIC INDICATORSPOPULATION GROWTHGOV’T INDEBTEDNESSPOPULATION GROWTH 2019-2025(CAGR)NET DEBT AS PERCENT OF GDP, 2021-1.0% -0.5% 0.0% 0.5% 1.0% 1.5%Canada1.0%United StatesEMPLOYMENT GROWTH0.4%0%CanadaGermany50%100%EMPLOYMENT GROWTH rance52%0.5%United Kingdom0.3%United KingdomFrance0.2%France106%G7 Average0.3%G7 Average109%United States0.3%United States109%Germany0.1%Japan0.1%G7 Average0.2%GermanyItalyJapan0.1%-0.3%-0.4%Source: Oxford Economics, International Monetary Fund, CBRE Research, 2021.ItalyJapanUnited Kingdom97%144%172%Italy1.0%0.4%-0.04%

2 INVESTMENT ACTIVITY

CANADA SEES ELEVATED ACTIVITY RELATIVE TO OTHER REGIONSCANADA INVESTMENT ACTIVITYInvestment Volume ( B)TransactionsInvestment Volume‘19 to ’20 Y-o-Y DeltaCanada:-22%US:-30%Global:-26% 50.0 45.0 40.010,0009,0008,000 35.07,000 30.06,000 25.05,000 20.04,000 15.03,000 10.02,000 5.01,000 2Overal Investment Volume ( M)Source: CBRE Research, Realnet Canada, RealTrack Limited, Collette Plante, JLR Land Title Solutions, Real Capital Analytics, Q4 2020.20132014Transactions201520162017201820192020

RECORD LEVELS OF DRY-POWDER CHASING SHRINKING YIELDSDRY POWDER AND YIELD COMPARISONSGlobal Dry Powder For Real Estate InvestmentAsset Yield ComparisonUS billion350Emerging Market Sovereign BondsCanadian Industrial Cap Rates300250200US High Yield BondsCanada Preferred SharesS&P/TSX Capped REIT IndexCanada High Yield BondsCanada Large Cap Stocks150100Europe Large Cap StocksAsia Large Cap StocksU.S. Large Cap Stocks500US 10 Year Treasury BillsGoC 10Yr BondsEU Sovereign Bonds0%Source: Preqin, CBRE Research, 2020.Yields as of April 20, 2021.Source: Refinitiv Eikon, CBRE Research, March 2021.1%2%3%4%5% 6% 7%Asset Yields

INDUSTRIAL TOPS INVESTMENT TARGETINVESTMENT ACTIVITY EXPECTATIONS2021Primary TargetBreakdown29%Multifamily36%Industrial otelSource: CBRE Americas Investors Intentions Survey 2021.10%Retail0%OfficeIndustrial &LogisticsMultifamilyRetailHotel/Resorts

CANADIAN LENDERS GROWING THEIR INDUSTRIAL BOOKLENDER INTENTIONS BY ASSET CLASS & GEOGRAPHYIncrease Maintain Decrease60.0%StrongRelationship SpecificModerateNo InterestGreater Toronto50.0%Deal Specific74%Vancouver60%40.0%Montreal9% 9% 9%14%51%17%6%9%17%20%30.0%Ottawa-Gatineau46%31%11% 0%0%0.0%OfficeSource: CBRE Research, 2020.RetailIndustrial20%40%60%80%100%

INDUSTRIAL CAP RATE SPREADS REACHED 5 YEAR HIGH IN 2020CANADA CAP RATES VS GOC BOND YIELDSCap RateHistorical Spread Comparison12.0%Trailing 25-Year Spreads10.0%TodayHighLowAvg504 bps199 bps399 bps395 bps186 bps8.0%478 bps6.0%258 bps504 bps4.0%483 bps2.0%10Yr GoC Bond YieldSource: CBRE Research, Refinitiv Eikon, May 1, 2021.National Average Industrial Cap 98199719961995199419931992199119900.0%

EARLY BET ON THE CANADIAN INDUSTRIAL MARKETPURE INDUSTRIAL REIT ACQUISITION JAN 2018MetricPriceSizeImplied Cap RatePremium toClosing PricePremium to NAVValue 3.8 B22.7 MSF4.8%20.5%26.6%

3 CURRENT FUNDAMENTALS

STELLAR PERFORMANCE LEADS SEES DOUBLE-DIGIT RETURNS2020 TOTAL RETURNSPRIVATE MARKETSPUBLIC 30%RetailOfficeSource: MSCI, RBC Capital Markets, February esidentialRentalIndustrial

CANADA CLAIMS THREE TIGHTEST MARKETS IN N.A.NORTH AMERICAN INDUSTRIAL MARKET COMPARISONCanada v U.S. – Availability RateNorth American Industrial Availability RatesAvailability Rate16.0%Availability 7.3%8.0%3.8%4.0%0.0%0.0%Source: CBRE Research, Canada Q1 2021, U.S Q4 2020.For markets with total inventory 150 MSF.Source: CBRE Research, Canada Q1 2021, U.S Q4 1.6%12.0%6.0%6.0%14.0%6.0%7.0%

ALL BUT TWO MARKETS AT OR NEAR RECORD LOWSAVAILABILITY RATE BY MARKETAvailability orontoVancouverWaterlooRegionLondonMontreal10-Year HighSource: CBRE Research, Q1 2021.National10-Year LowOttawaQ1 2021WinnipegHalifaxCalgaryEdmonton

RENTS CLIMB TO RECORD HIGHS THROUGH THE PANDEMICRENTAL RATES IN CANADIAN GATEWAY MARKETSNet Asking Rent (per sq. ft.) 15.00 14.00Vancouver, 14.00 13.00 12.00 11.00Toronto, 10.45 10.00 9.00Montreal, 8.10 8.00 7.00 6.00 5.00 4.00Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q12007Source: CBRE Research, Q1 0192020 2021

DEMAND LEADING TO RECORD CONSTRUCTION LEVELSNATIONAL NEW SUPPLY DELIVERIESNew Supply (MSF)352019/2020:Highest levels of New Supplysince Global Financial Crisis3025202021:Set to outpace 2019/2020totals by over 25%15105020112012Source: CBRE Research, Q1 2021.201320142015201620172018201920202021

HOWEVER, ‘RECORD’ CDN LEVELS ARE LOW ON RELATIVE BASISCONSTRUCTION AS PERCENT OF EXISTING INVENTORYConstruction as % of Existing InventoryThe Practical Reality:1. Cdn Markets are 3 tightest in North America,yet all are building less than the US average.4.5%4.0%3.5%2. Further, the Canadian industrial pipeline isalready 70% preleased as of Q1 2021.3.0%2.5%2.0%1.5%1.0%0.5%Largest 15 Industrial Markets in North America0.0%Source: CBRE Research, Q1 2021.

A SUPPLY-CONSTRAINED MARKETTHE ONTARIO GREENBELTNearly all majordevelopmentslocated in closeproximity to theOntario GreenbeltFor all GTA industrial development projects 500,000 sq. ft. or larger expected to be completed over the next three years.Source: CBRE Research, 2020.

INDUSTRIAL DEVELOPMENT CHARGESGTA INDUSTRIAL DEVELOPMENT TRENDSRegional DCMunicipality DCEducational DCHalton Greenfield DCYork 45 40 per sq. ft. 35HaltonPeel 30 25Durham 20 15 10Toronto 5Construction Materials includes fabricated metal products and construction materials.Source: Statistics Canada, CBRE Research, 2021.OshawaWhitbyAjaxPickeringYorkEast YorkEtobicokeScarboroughNorth nRichmond HillCaledonBramptonMississaugaBurlingtonHalton HillsMiltonOakville 0

SUPPLY-DEMAND GAP PUSHES LAND VALUES TO NEW HEIGHTSTORONTO VS. NATIONAL INDUSTRIAL LAND VALUESIndustrial Land Values ( /acre) 1,800,000 1,600,000GTA Industrial Land Price Growth 1,400,000 1,200,000 1,000,0002009 to 20162016 to 2020 5.7% per year 22.5% per year 47.5% total growth 124.9% total growth 800,000 600,000 400,000 200,000200920102011201220132014TorontoSource: CBRE Research, Q4 2020.2015National20162017201820192020

BUILDING CONSTRUCTION COSTS ON THE RISEINDUSTRIAL PRODUCT PRICE INDEXIndex Base 100 2002155Construction MaterialsInflation (All Items)150145140135“Cost of steel hasdoubled in 6 months”1301251202014201520162017Construction Materials includes fabricated metal products and construction materials.Source: Statistics Canada, CBRE Research, 2021.201820192020

2020 LAND PRICING AFFECT ON ACHIEVABLE RENTS GTA58.0 Acres 2.3M/AC19.0 Acres 2.8M/AC41.0 Acres 2.2M/AC60.0 Acres 3.3– 3.5M/AC32.0 Acres 3.3M/AC30.0 Acres 2.5M/AC15.6 Acres 2.6M/AC15.0 Acres 2.3M/AC12.6 Acres 3M/AC8.0 Acres 2.1M/AC

MULTISTORY DEVELOPMENTS ‘ON THE RISE’MULTISTORY DEVELOPMENT MAPNo Longer Just a US Trend: Vancouver, BCRiverbend Business Park, Oxford PropertiesSource: CBRE Research, 2021.

4 SECTOR OUTLOOK

ECOMMERCE: THE LEADING DRIVER OF NEW LEASESTOP NEW LEASE DEALS IN CANADA 2020Ecommerce7.2MSFRetail & cs4.8MSFManufacturing3.5MSFF&B Manufacturing1.4MSFPaper, Pulp, Packaging & Printing1.1MSFAuto Manufacturing1.0MSFCreative Industries0.5MSFHealth 5.06.07.08.0Total MSF TransactedNew lease deals include expansions and extensions for identified tenant industries.Source: CBRE Research, Q4 2020.

ECOMMERCE DEMAND STILL IN EARLY STAGESCANADIAN ECOMMERCE PENETRATIONEcommerce Penetration20%Incremental EcommerceDemand18%16% 42.4 MSFof incremental industrialdemand that exceeds allspace currently availableand under construction inVancouver, Toronto andMontreal combined.14%12%10%8%6%4%2%0%20152016Source: Euromonitor, CBRE Research, 2021.201720182019202020212022202320242025

REAL ESTATE COSTS ONLY SMALL PART OF THE EQUATIONSUPPLY CHAIN COSTSSource: CBRE Research, 2020.

THROUGH-PUT NEEDS SEEING CLEAR HEIGHTS INCREASESUPPLY CHAIN INNOVATIONSSource: CBRE Research, Q1 2021.

JUST-IN-CASE TO INCREASE ON-HAND INVENTORY LEVELSINVENTORY MANAGEMENT MODELSA 5% increase in on-hand inventory /occupied space wouldbe challenging toaccommodate given thenational availability rateis only 2.9%.CompanyCompanyResourcesProblems andBottlenecks

REVERSE LOGISTICS EVEN MORE SPACETRADITIONAL VS. REVERSE LOGISTICS acturingDispositionDecisionRecyclingSell as NewDispose ofProductProductFlowsForwardReverseSource: “Retail Supply Chain Management” by James B. Ayers, 2007.Stores /ConsumersDistributor /WholesalerFactoryRemoveItemFix ctReturnsSeasonalReturnsDirect toEnd UserStores /Consumers

GROCERS STILL VERY EARLY IN THE SHIFT TO E-GROCERYFOOD & BEVERAGE ONLINE SALES GROWTHGrocery Spend Online as % of Total Food & Beverage Sales5.0%FORECAST4.1%4.0%2.5x3.0%2.0%Grocers that made significant investment into supportingonline shopping habits in 820172016201520140.0%Source: Euromonitor and CBRE Research, 2021.Sobeys – Voilà – 2.1B into distribution centres inON, BC, QC and AB powered by Ocado Loblaws – partnership with Gatik to deploy driverlesstechnology Metro – 800M into logistics network in ON & QC

THANK YOUResearch Disclaimer:Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and makeno guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for useby CBRE Limited clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE Limited.

10Yr GoC Bond Yield National Average Industrial Cap Rate Source: CBRE Research, Refinitiv Eikon, May 1, 2021. INDUSTRIAL CAP RATE SPREADS REACHED 5 YEAR HIGH IN 2020 CANADA CAP RATES VS GOC BOND YIELDS 186 bps 478 bps 258 bps 504 bps 483 bps Historical Spread Comparison Trailing 25-Year S

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