Cadillac Fairview CEO: Office boom sustained by companies coming back to downtown Toronto
Count Cadillac Fairview Corp. as another Canadian developer looking to capitalize on the booming demand for rentals in cities such as Toronto and Vancouver.
Until the last few years, there wasn’t enough volume to make rentals worthwhile, said John Sullivan, president and chief executive officer of Cadillac Fairview. “Today in certain markets, you can get the rents to justify developments and that’s quite frankly why we’re thinking about it,” Sullivan said in a phone interview.
Though Cadillac Fairview has developed condominium projects, apartment buildings would be a first for the Toronto-based real estate unit of the Ontario Teachers’ Pension Plan Board. High home prices and government regulations that have crimped buying power have led to a rise in rental demand in Canadian metropolises. Rents soared about 11 per cent in Toronto in the first quarter from a year earlier, according to researcher Urbanation.
“It’s partly because people can’t afford to buy a condo now that rental is becoming more and more of an option,” Sullivan said. “We still think there’s demand for both and will likely do both.”
Cadillac Fairview is considering adding apartment buildings to its Richmond Centre project in Vancouver. The 27-acre (11-hectare) development site has 2 million square feet (185,000 square meters) of residential space that can fit over 2,000 homes. Condos will be part of the mix, and the entire project is expected to cost more than $500 million, Sullivan said.
“There’s just huge demand,” he said. Cadillac Fairview would join companies such as Tricon Capital Group Inc. in bringing more rentals to market.
The company is also looking at expanding its business to Europe and Asia. “We’re always considering different asset classes” and different geographies, Sullivan said.