Toronto landmarks get makeovers in race for tenants

Toronto

A CANADIAN pension fund is planning a makeover of an iconic Toronto bank complex amid hot competition for tenants among the city's modern tower complexes.

QuadReal Property Group, a unit of British Columbia Investment (BCI) Management Corp, wants to replace two 1970s-era buildings in Commerce Court with a development that will allow for larger, state-of-the-art offices and a spate of new amenities.

Remco Daal, president of Canadian Real Estate at QuadReal, said the new building will have "all the cool places to eat and to work out, and collision spaces that everybody talks about".

Toronto's bank towers have long dominated the city's skyline. Each of the big five banks has its tower: For example, Royal Bank of Canada's shiny gold building, and Toronto-Dominion Bank's monolithic black slabs.

But new buildings offering more open and eco-friendly spaces that attract millennial workers are springing up. These include a 46-storey tower being developed by Cadillac Fairview Corp, and one pitched by Oxford Properties Group, which would be of Canada's biggest mixed-use projects.

Still, office vacancy rates in city's downtown are the lowest in North America, driven by a tech and financial-services boom.

Vancouver-based QuadReal plans to take down the South and East towers of the 2-million-square-foot Commerce Court complex, which together have 18 floors.

The original Commerce Court North, which houses the headquarters of Canadian Imperial Bank of Commerce (CIBC), was built in 1931. It includes a vaulted gold-coffered ceiling and classic Art-Deco design and will be incorporated into the makeover.

The plan is in early stages and still needs city approval. If this is obtained, occupancy could start in 2025, said Mr Daal.

CIBC, which now takes up 650,000 sq ft at Commerce Court, is relocating its headquarters to two new office towers on the south side of Bay Street.

CIBC declined to comment on its plans regarding Commerce Court.

Like many of its peers, QuadReal is looking to expand its real estate portfolio, which has more than C$37 billion (S$38.57 billion) in assets. The majority of its assets are in Canada, but it is aiming for an equal split between Canada and the rest of the world, including cities like New York, London and Hong Kong in the next three years. It is bullish about investing in logistics, data centres, residential developments and mixed-use projects in urban cities.

The company has also partnered with the asset management division of the Royal Bank of Canada for a new, C$7.5 billion open-ended fund with an average annual total return target of 6 per cent.

QuadReal was recently awarded BCI's C$5.4 billion mortgage business, said chief executive officer Dennis Lopez. BLOOMBERG