George Myhal
Director & Chairman
Board of Directors
George Myhal
Lorraine Bell
Simon Dean
Allen Karp
Gail Kilgour
Forward-Looking Statement
This presentation contains “forward-looking statements” The words “plan”,
“believe,” “expect,” “anticipate,” “intend,” “estimate” and other expressions
which are predictions of or indicate future events and trends and which do not
relate to historical matters identify forward-looking statements. Reliance should
not be placed on forward-looking statements because they involve known and
unknown risks, uncertainties and other factors, which may cause the actual
results, performance or achievements of the Fund to differ materially from
anticipated future results, performance or achievement expressed or implied by
such forward-looking statements. Factors that could cause actual results to
differ materially from those set forward in the forward-looking statements
include general economic conditions, interest rates, availability of equity and
debt financing and other risks detailed in the Fund’s annual information form
filed with Securities Commissions. The Fund undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by law.
Phil Soper
President & CEO
Topics for Discussion
Leadership
Operating achievements
Financial performance
Housing Market Dynamics
Interest rates
Consumer confidence
Moderating house prices
Industry Developments
New entrants in low end of market
IDX update: debate on access and sharing of data
Quebec market: new regulations
2011 Highlights & Achievements
Shelter Foundation: new fundraising record reached
Via Capitale: launch of new tools
Royal LePage: Mobile, Commercial and 100-year anniversary
Q&A
PERFORMANCE
Financial Results
2011 Financial Results
COMPANY GROWTH
(number of
REALTORS®)
* As of Jan 1st 2012.
Prior years also as of Jan 1st.
ROYALTIES
($ millions)
2011 Financial Results
CASH FLOW FROM OPERATIONS
SHAREHOLDER DIVIDEND
($ millions)
($ per Share)
* Defined as net income prior to fair value changes,
amortization, impairment, interest on exchangeable units,
interest on Trust units, income taxes, items related to
other income and interests of exchangeable
shareholders.
* After conversion from an income trust capital structure
to a taxable corporation
National Network of REALTORS®
From Coast to Coast
OVER 15,000 AGENTS AND 665 LOCATIONS
HOUSING MARKET
Activity
Dynamics
Update on Market Activity
On a rolling twelve-month
basis, Market transactional
dollar volume of $168.0
billion, closed up 11% from
March 31, 2011, driven by a
6% increase in selling price
and an increase in home
sale activity of 5%.
For the three months ended
March 31, 2012,
transactional dollar volume
was up 5% over the same
period in 2011, driven by a
1% and 4% increase in
selling price and home sale
activity, respectively.
Three months ended
Canada
Transaction dollar volume
Average selling price
Number of units sold
Quarter 12-mth rolling
% Change
% Change
5%
1%
4%
16%
2%
14%
Greater Toronto Area
Transaction dollar volume
Average selling price
Number of units sold
18%
10%
7%
15%
5%
9%
Twelve months ended
(2011)
Canada
Transaction dollar volume
Average selling price
Number of units sold
11%
5%
5%
1%
0%
1%
Greater Toronto Area
Transaction dollar volume
Average selling price
Number of units sold
19%
9%
9%
4%
2%
2%
Housing Market Dynamics
Interest rates
Housing values continued to climb in 2011
Growth stimulated by ongoing ultra low interest rates
Concerns over debt levels
Consumer confidence
Strengthening U.S. economy is impacting Canadian
consumer confidence positively
Conference Board index improving each month in 2012
Moderating house price appreciation
Signs exist of over-shooting values and strained affordability
in our largest cities
Likely more modest price appreciation as the year unfolds
Interest Rates
While interest rates are bound to rise, we believe any
2012 changes will be moderate
Fragile recovery with modest economic growth
Low risk of significant inflation increase
Unsettled global economic environment, especially Europe
With high household debt levels, the impact of a significant
interest rate increase could be damaging
Bank of Canada generally prefers rates to be only modestly
above those set by the U.S. Federal Reserve
Rising Canadian interest rates place upward pressure on the
dollar, which is already seen as too high
Canada’s Housing Market Steadies
EXISTING HOME SALES
EXISTING HOME SALES
000s of units, annualized
$000s, national average
forecast
forecast
10-year average
Canada
Source: CREA, Scotia Economics.
Canada
Affordability Still Good but has Probably Peaked
HOUSING AFFORDABILITY
MORTGAGE DELINQUENCIES
ratio of mortgage payments to disposable
income per worker
% of total loans past due three or more months
U.S.
Canada
LT Average = 0.38
Based on average MLS price, 5% downpayment, 25-year
amortization, and average of prime & 5-year posted rate.
Source: MBA, CBA, Bloomberg, Scotia Economics.
Rising High-Rise Demand
HOUSING STARTS
% share of total
Single-detached
Apartment
Source: CMHC, Scotia Economics.
WHY IS CONDO LIVING
SO POPULAR?
Demographics
Affordable
Lifestyle choices
Selection
Urban intensification
Tight rental vacancy
Investor factor
INDUSTRY DEVELOPMENTS
New Entrants: Discount Brokerages
IDX: Sharing Data
Québec’s New Regulations
New Entrants: Discount Brokerages
Discount brokerage & For-Sale-byOwner (FSBO) firms operate within
the low-fee, narrow service segment
of the Canadian real estate market
Limited impact on Company’s
performance to-date
Market share changes appear to be
between existing and new low-fee
providers; full service firms holding
steady
Without significant market share
gains, new entrants questionable as
going-concerns, particularly in soft
markets
Anticipate consumers will continue to
look to professional guidance during
the home-buying and -selling process
IDX: Sharing Data
The Company a proponent of
the Internet Data Exchange
(“IDX”) movement
Shared property listings among
Multiple Listing Service (“MLS”)
participants
National/regional firms display
each other’s website listings
Consumers will be able to see
many more listings on
www.royallepage.ca
Brokers need to opt-in
Already well established in
some regions of the country
and U.S.
IDX: Lead Generation
Canadian Real Estate Association
(“CREA”) investing in the initiative
Developing the platform to establish
permissions and facilitate data
sharing
With more listings, real estate
companies will enjoy similar
consumer viewership as
www.realtor.ca
BRESI Web Properties Adapting
Via Capitale IDX enabled today
Re-designing Royal LePage’s website
to capture leads
User-friendly with valuable new
information, unique data and features
Québec: New Regulations
Introduction of stringent new
real estate educational
requirements and higher
licensing costs
Many fewer new agents
entering industry
Modifying our training
programs
Working with government to
encourage support for new
entrants
2011 HIGHLIGHTS AND
ACHIEVEMENTS
New Tools at Via Capitale
Via Capitale services the
Québec market
Celebrated 20 years in
business with an extensive
rebranding, including a name
change from La Capitale
Late 2011, new marketing tools
were launched to further
simplify the process of buying
and selling including:
Via Mag
Via Visite
Via Mag
Via Mag is a program that creates a custom eight page
real estate magazine devoted exclusively to marketing a
single property
Via Visite
Via Visite lets
clients view listings
live via their agent’s
smart phone
camera
Johnson & Daniel Division
2011 was another year of
significant market share gain
Achieved #1 in Central Toronto for
unit sales and sales volume
Enhanced social media presence
for division and agents
Continued enhancement of
professional development
activities
Expanded presence in West
Toronto, King and Caledon, and
Lake Simcoe recreational
property market
Royal LePage Goes Mobile
2011 saw mobile media
use accelerate across
markets
Popularity of
smartphones
The growing availability
of WiFi hotspots
Shift towards a
constantly connected
consumer lifestyle
Royal LePage Goes Mobile
Royal LePage launched an
innovative mobile site for
Smartphones
Cross-Canada listing information
including schools, restaurants
and neighbourhoods
Includes seller and agent
comments with neighbourhood
“walkability scores” consumer
rankings of nearby businesses
invaluable to users
Ability to search nationwide
listings or connect with an agent
Royal LePage Shelter Foundation
A record-setting $2 million was
raised in 2011
Superb brand awareness &
regional team building tool
Since its founding in 1999, more
than $14 million raised
Past five years, fundraising results
doubled and recognition through
national awards for excellence
100% of the funds go to violence
prevention in schools, and direct
annual support of over 30,000
women & children
POTENTIAL FUTURE
GROWTH
OPPORTUNITY
Manager Activity
Prudential Acquisition
Beyond Canada, the Manager made headlines in
December 2011 with the acquisition of Prudential
Residential Real Estate and Relocation Services
Establishes Brookfield as #3 in the N.A. residential real
estate brokerage market with ~80,000 real estate agents
and 2,800 locations
Creates the clear #2 player in global relocation, managing
~85,000 relocations per year
Prudential Acquisition
Prudential joined Real Living
in the Manager’s U.S. real
estate portfolio
BRESI is working with
Brookfield to monitor the
slowly recovering U.S. real
estate industry as a source
of potential growth
The Rebirth of Royal LePage Commercial
The Manager re-launched
Royal LePage Commercial
on April 3, 2012
Target market: the underserviced commercial real
estate needs of small and
medium-sized businesses
and investors in Canada
Royal LePage Commercial
Provides a complete set of tools and resources for
commercial practitioners
A new Commercial logo, and dedicated website were
launched
Clients will also benefit from working with an accredited
Royal LePage agent who has met specific entrance criteria
Trending ahead of plan in early adoption
FOR A CENTURY,
CANADA’S REAL
ESTATE COMPANY
100 Years of Real Estate Innovation
In 2013 Royal LePage will reach an impressive
corporate milestone with its 100th anniversary
Plans are underway to celebrate nationally
Focus on innovation showcasing a century of Canadian
real estate and housing, including the company’s
contributions to the housing industry and
communities across Canada; and invite us to imagine
the world of real estate 100 years into the future
100 Years of Real Estate Innovation
Consumer and network targeted initiatives such as
posters, videos, contests, swag, decals, Facebook game,
local office celebrations, fundraising challenges for the
Shelter Foundation, public relations initiatives, and more
We hope to increase credibility, consumer awareness
and visibility for our brand
THANK YOU!