September 19, 2012
The commercial real estate sector (CRE Sector) makes a substantial contribution to the Canadian economy, generating $63.3 billion in economic activity in 2011, according to a groundbreaking new research report from the Real Property Association of Canada (REALpac) and the NAIOP Research Foundation. To put this value into perspective, the economic activity of the Canadian CRE Sector is more than twice as large as the entire economy of the province of Newfoundland & Labrador. The CRE sector adds to the Canadian economy in various ways by:
- Supporting 340,000 jobs, many of which are high-paying professional jobs, which is roughly equivalent to the total employment in the entire Canadian agriculture industry;
- Generating $18.1 billion in personal income, related to labour income and other sources of income, which is more than twice the labour income of the Canadian agriculture, forestry, and fishing industries combined;
- Generating $12.5 billion in corporate profits earned by many small and medium companies, as well as some of the largest pension funds and insurance companies in Canada;
- Contributing $7.2 billion in personal and corporate income tax revenues for the federal and provincial governments; and ultimately
- Accounting for $32.4 billion in total net contribution to Canada's GDP, which is more than the total GDP of New Brunswick.
Prepared by Altus Group Economic Consulting, "The Contribution of the Commercial Real Estate Sector to the Canadian Economy" shows that capital investment in the CRE Sector totalled some $21.6 billion in 2011, accounting for about half of the total spending in Canada on non-residential construction. Some $14.9 billion was spent on new buildings; the rest ($6.7 billion) accounted for capital improvements, renovations and the upgrading of existing buildings.
The on-going operations of CRE Sector buildings also generated $3.5 billion in building management fees and almost the same amount for commercial brokerage fees from sales of commercial properties in 2011.
The CRE Sector also generates an array of other benefits to the national economy such as the promotion of economic development and accommodation of employment growth. In addition, properties owned by the CRE Sector provide substantial revenue to municipalities and school boards across Canada through realty taxes.
The CRE Sector plays an important role in Canada's economy and the quality of life for all Canadians. Development and construction of commercial real estate buildings, and subsequently their daily operations, creates directly thousands of jobs and adds tremendous value to the Canadian GDP. Beyond the strict numbers of economic activity, spinoff benefits, jobs created, income earned and taxes generated, the CRE Sector is also responsible for imparting a tremendous benefit to communities across Canada by providing high-quality workspaces for millions of Canadians and places for Canadians to live, eat, shop and play.
To download "The Contribution of the Commercial Real Estate Sector to the Canadian Economy", please go to http://www.naiop.org/en/Research/Our-Research/Reports/The-Contribution-of-the-Commercial-Real-Estate-Sector-to-the-Canadian-Economy.aspx.
About the Real Property Association of Canada
REALpac is Canada's premier industry association for investment real property leaders. Our mission is to collectively influence public policy, to educate government and the public, and to ensure stable and beneficial real estate capital and property markets in Canada.
REALpac members currently own in excess of $180 Billion CAD in real estate assets located in the major centres across Canada. Members include real estate investment trusts, publicly traded and large private companies, banks, brokerages, crown corporations, investment dealers, life companies, lenders, and pension funds. For more information, please visit us at www.realpac.ca.
About NAIOP and the NAIOP Research Foundation
NAIOP represents commercial real estate developers, owners and investors of office, industrial, retail and mixed-use properties. It provides strong advocacy, education and business opportunities, and connects its members through a powerful North American network. For more information, visit www.naiop.org.
The NAIOP Research Foundation was established in 2000 as a 501(c)(3) organization to support the work of individuals and organizations engaged in real estate development, investment and operations. The Foundation's core purpose is to provide these individuals and organizations with the highest level of research information on how real properties, especially office, industrial and mixed-use properties, impact and benefit communities throughout North America. The initial funding for the Research Foundation was underwritten by NAIOP and its Founding Governors with an endowment fund established to fund future research. For more information, visit www.naioprf.org.
About Altus Group Limited
Altus leads the global real estate industry in offering professional real estate advisory services, data solutions and intelligence about an organization's assets, generating a wealth of knowledge and insight. With a staff of over 1,700, Altus has a network of over 60 offices in 14 countries worldwide, including Canada, the United Kingdom, Australia, Asia and the United States. We operate five interrelated Business Units, bringing years of experience and a broad range of expertise together into one comprehensive platform: Research, Valuation and Advisory; Cost Consulting and Project Management; Realty Tax Consulting, Geomatics and ARGUS Software. Altusʹ clients include banks, financial institutions, governments, pension funds, asset and fund managers, developers and landlords and companies engaged in the oil and gas industry. Visit us at www.altusgroup.com.
About Altus Group Economic Consulting
Altus Group Economic Consulting was formed in February 2007 when Clayton Research Associates Limited (est. in 1972) joined in Altus Group. Altus Group Economic Consulting is a group of urban and real estate economists and provides strategic advice and information to both private and public sector clients across Canada. The division specializes in real estate market analysis, land use planning issues, property investment and financing, and building products and technology analysis. Altus Group Economic Consulting has gained a reputation for astute and independent advice and analysis, based on extensive in-house expertise, a unique information base, leading edge analytical techniques and extensive contacts throughout Canada.
For further information:
Paul Morse, CEO, REALpac, 416-629-6587 or 416-642-2700 x225, or Kathryn Hamilton, Vice President for Marketing and Communications, NAIOP, 703-904-7100, x165.
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