2016 Scoring Canadian Tech Talent - EDCO

// CBRE RESEARCH

2016 SCORING CANADIAN TECH TALENT

Influencing Innovation, Economic and Real Estate Growth in 10 Canadian Markets

takeaways // //715.6K tech-talent workers are concentrated across four key occupations 324.2K COMPUTER SYSTEMS/ SUPPORT

187.1K

148.7K

SOFTWARE DEVELOPERS

55.6K

TECH ENGINEERS

TECH MGMT.

//Top ranked tech-talent markets showed strong labour pool and job growth

1

83.94 Toronto, ON

67.25

61.26

58.80

50.37

Vancouver, BC

Ottawa, ON

Montreal, QC

Calgary, AB

//Tech employment in Canada has grown by 24% or 137.7K jobs over the past five years

2

74.4%

Waterloo, ON

58.5%

Winnipeg, MB

50.1%

50.0%

Vancouver, BC

Halifax, NS

1

2

Scored on a scale of 1-100;

35.6%

Toronto, ON

2

Tech talent growth, 2010-2015.

2016 SCORING TECH TALENT | CBRE Research

//Tech-talent potential is concentrated in well-educated markets Highest Educational Attainment, Bachelor’s Degree or Higher

43.4%

38.6%

1. Ottawa, ON

2. Toronto, ON

//Tech-talent employers examine talent and real estate costs to guide location decisions

3

Highest Cost Markets

Lowest Cost Markets

$39.8M

$38.2M

$31.6M

$30.7M

1. Calgary, AB

2. Ottawa, ON

9. Halifax, NS

10. Winnipeg, MB

3

© 2016 CBRE Limited

Estimated 1 year cost wage and rent obligation for typical tech firm (500 employees, 75,000 sq. ft.).

3

4


contents // Scoring Canadian Tech Talent is the latest edition of a CBRE Research thought series. By analyzing labour market conditions for highly-skilled tech workers, 10 Canadian cities were ranked according to their competitive advantages and appeal to tech-talent workers and tech employers. This edition is unique as it focuses largely on established tech occupations with over 1,500* employees, as tracked by Statistics Canada. The analysis also provides insight into tech-talent demographics and how their growth patterns are impacting cities and real estate markets across Canada.

//what is tech talent and why is it important?

6

//where are the top-ranked tech-talent markets?

8

Tech talent is a group of highly-skilled workers in more than 10 technology-oriented occupations driving innovation across all industry sectors.

A scorecard measuring 13 different metrics to gauge the competitive advantages of markets and their ability to attract and grow tech talent pools determined the topranked tech-talent markets.

//how to find tech-talent momentum markets?

13

//what do tech-talent markets look like?

16

//what is a startup city?

21

Tech-talent growth rates are the best and most easily quantified indicator of labour pool momentum and patterns across both large and small markets.

Tech-talent markets are characterized by high concentrations of university-educated workers, major universities producing tech graduates and large millennial populations.

Today’s startups could become next year’s tech giants. The ability to attract, support and incubate small firms could help cities elevate their rankings in future editions of this report.

//how do commercial real estate costs impact tech talent? 22 Employee wages and office provide insight into annual operating costs, market by market.

//how does tech talent impact commercial real estate? Markets with high concentrations or clusters of rapidly growing tech-talent employers have driven office leasing demand, causing rising rents and declining vacancies.

26

*As per Labour Force Survey by Statistics Canada, NOC codes that fall below the confidentially threshold have been suppressed. Confidentiality threshold as follows: 1,500 employees for ON, AB, BC; 500 employees for NS, MB.


5

//

what is tech talent and why is it important?

Technological evolution continually influences the way we live and how we work. Increased access to information has altered the way we experience the world, and the interconnectivity between our cell phones, computers, homes and offices provide an ever seamless transition between work and play. The internet is the backbone of commerce. It is the infrastructure used by companies to compete globally for consumers, and to provide traditional goods and services that meet increasing consumer demands for experiences and product interaction. More than 715,000 tech innovators at established companies across Canada are working on technological advances. Statistics Canada’s definition of tech talent consists of four job classes ranging from software developers and programmers, to computer support and database systems workers. These jobs are highly concentrated within the high-tech industry but span a broad range of companies in various sectors of the economy (Figure 1). These innovators or tech-talent workers are highly skilled, sought-after employees and commercial real estate tenants.

6

By these definitions, tech talent comprises 4.7% of the total Canadian workforce. So what impact does such a small portion of the economy have on commercial real estate? From 2013-2015, the number of tech-talent employees at established companies has grown 9.0% adding more than 88,000 jobs to the Canadian economy. Tech companies have also been one of the largest drivers of office leasing activity in Canada. In 2015, tech companies accounted for 16.1% or 2.0 million sq. ft. of significant office leases in Canada. Landlords are competing for tech companies, who have been the most active in filling existing character buildings and are increasingly defixturing new office towers to fashion creative spaces in amenity filled neighbourhoods. Tech talent is a quickly expanding segment of the market and is spurring innovation within non-tech sectors. It is also shaking up the tenant mix and technical requirements for office buildings across Canada.


FIGURE 1

CANADIAN TECH TALENT LABOUR FORCE BREAKDOWN (2015)

INFORMATION SYSTEMS TESTING TECHNICIANS

INCLUDING TECHNOLOGISTS AND TECHNICIANS

MECHANICAL ENGINEERING TECHNOLOGISTS AND TECHNICIANS DATABASE ANALYSTS AND DATA ADMINISTRATORS

Source: CBRE Research, Statistics Canada LFS (NOCs), May 2016.


7

//

where are the top-ranked tech-talent markets?

The rise in technology enabled mobility and the need to pursue talent wherever it is located has encouraged technology companies to spread to markets across Canada. Former technology strongholds, Ottawa and Waterloo, continue to house global tech leaders and have extensive experience with the boom-bust cycle of the industry. Increasingly, tech pedigree has become equally important to potential tech tenants as costeffective locations in smaller markets. These factors combined have led to increased office demand by tech companies across Canada. CBRE Research has ranked 10 of Canada’s largest cities by the number of tech-talent workers located there (Figure 2). This overall scorecard uses 13 metrics that together equate to four tech industry indicators of success: Employment, Education, Tech Industry

8

Outlook and Real Estate Market Outlook. The metrics in each category have been weighted by relative importance to companies seeking tech talent. For example, tech labour costs are weighted heavier than office tenant rent because companies allocate more capital to labour compared to real estate. Tech talent concentration metrics, or the percentage of total employment that tech represents, have the highest weight because they identify clusters of talent, signifying market strength. Overall, Toronto and Vancouver earned the number one and two rankings in the first edition of Scoring Canadian Tech Talent. Ottawa and Montreal placed third and fourth, respectively, while Calgary surprised to round out the top five markets.



9

FIGURE 2

TECH TALENT SCORECARD RANKINGS Click on a Market to See the Full Scorecard

10

83.94

67.25

61.26

#1 Toronto, ON

#2 Vancouver, BC

#3 Ottawa, ON

34.19

34.06

32.52

#6 Halifax, NS

#7 Edmonton, AB

#8 Waterloo, ON


58.80

50.37

#4 Montreal, QC

#5 Calgary, AB

16.88

12.99

#9 Winnipeg, MB

#10 London, ON

Source: CBRE Research; CBRE Econometric Advisors; Statistics Canada; CMHC


11

12


//

how to find tech-talent momentum markets?

Employment Demand for tech talent across all industries is growing and it has been easy for large cities like Toronto and Vancouver to fulfill this need due to their tech talent concentration stemming from their economy’s size and strength. Large markets tend to have a deeper pool of talent, while comparatively smaller markets attract talent with more competitive business and living costs. Waterloo, one of the smaller markets studied in terms of overall population, had the fastest growing pool of tech talent, with those employed in technology occupations growing 74% from 2010-2015. Winnipeg was second at 58% growth while Halifax and Vancouver were tied at 50%.


However, analyzing tech labour growth over several consecutive two-year periods shows that momentum has shifted. While increasing in five other markets, tech employment growth as captured between 2013-2015 slowed in Waterloo from what was seen between 2011-2013. Looking strictly at growth between 2013-2015, London led the pack with a significant 94% growth off a relatively small base, and Halifax and Toronto both had double digit growth. Employment growth in tech occupations has a multiplier effect that positively impacts economic growth, which has an immense impact on commercial real estate within that market.

13

FIGURE 3

TECH TALENT LABOUR POOLS (2015) by Market City

Toronto, ON Montreal, QC Ottawa, ON Vancouver, BC Calgary, AB Edmonton, AB Halifax, NS Waterloo Region, ON Winnipeg, MB London, ON Canada

Tech Talent Total

179,200 112,900 65,400 57,500 37,400 21,700 12,000 10,409 10,300 3,100 715,600

Growth Growth by Concentration of Rate1 Volume2 Total Jobs3

35.6% 26.0% 9.2% 50.1% 19.1% 13.6% 50.0% 74.4% 58.5% -38.0% 23.8% 1

47,000 23,300 5,500 19,200 6,000 2,600 4,000 4,440 3,800 (1,900) 137,700

6.9% 6.5% 10.6% 5.4% 5.5% 3.3% 6.4% 2.9% 2.9% 1.4% 4.6%

2010-2015; 2 2010-2015; 3 2015. Source: Statistics Canada May 2016.

FIGURE 4

CHANGE IN MOMENTUM OF TECH TALENT LABOUR POOLS (2011-2013 VS. 2013-2015) City

London, ON Halifax, NS Toronto, ON Vancouver, BC Edmonton, AB Montreal, QC Ottawa, ON Calgary, AB Winnipeg, ON Waterloo Region, ON Canada

Growth (2011-2013)

Growth (2013-2015)

6.7% 2.6% 3.7% 30.2% 8.7% 7.7% 3.7% 21.6% 55.6% 13.8% 9.0%

93.8% 53.8% 18.0% 9.3% 9.0% 7.1% 7.0% 5.4% 5.1% 1.8% 9.8%

Source: Statistics Canada, May 2016.

14


In addition to size and growth, the tech concentration – or percentage of total tech employment – is an influential factor in ranking markets for tech talent. Toronto’s tech employment base contains 25% of Canada’s tech talent – the highest in Canada and far outstrips Montreal at number two with a 16% concentration. Ottawa rounds out the top three most concentrated tech markets with a tech talent pool representing 9% of the overall tech labour force. Each has a sizeable concentration of highly-skilled workers which offers an environment conducive to innovation.

TECH EMPLOYMENT RANKINGS

1. Toronto, ON 2. Montreal, QC 3. Vancouver, BC 4. Ottawa, ON 5. Calgary, AB 6. Edmonton, AB 7. Waterloo, ON 8. Halifax, NS 9. Winnipeg, MB 10.London, ON


15

//

what do tech talent markets look like?

Education A common aspect of the top tech-talent markets is high educational attainment (minimum university undergraduate degree). All 10 of the largest markets have an educational attainment rate above the Canadian average of 28%. In Ottawa, more than 40% of the working age population have high educational attainment (Figure 5), with Toronto, Halifax, Vancouver, Calgary and Montreal all reporting above 30%. Despite a large population with higher education credentials, demand for these skilled employees is very strong. As such, certain cities are seeing university degree completion rates climb quickly. Ottawa leads completion growth rates with 14.5% more degrees expected from 2015-2020. This is one metric that seems to favour smaller markets, with Edmonton and London rounding out the top three.

16

EDUCATION RANKINGS

1. Ottawa, ON 2. Vancouver, BC 3. Toronto, ON 4. Halifax, NS 5. Edmonton, AB 6. London, ON 7. Calgary, AB 8. Montreal, QC 9. Waterloo, ON 10.Winnipeg, MB


Tech Industry Outlook Another notable characteristic of tech-talent markets is a high concentration of tech-savvy millennials1 in the local workforce. Millennials have exhibited a preference for living in cities rather than suburbs, which has increased downtown populations significantly. Their robust entrance into the labour pool contributes greatly to the growth of tech talent within the 10 markets tracked for this analysis (Figure 8). Nearly half of those markets had their millennial population increase by more than 10% between 2009-2014, with smaller markets like Winnipeg, Ottawa, Halifax, and London registering even higher growth. Despite variations in growth rates, the millennial population that accounts for between 15-18% of the population of all 10 Canadian cities is much more stable than in the U.S., where Boston and Pittsburg had millennials account for 25% of total population.

clusters. Tech clusters typically form around preeminent universities where companies have access to a constant flow of new talent. Toronto has eight publically-funded post-secondary institutions and is a magnet for recent university grads from across the province and country. Tech clusters also form around leading tech companies such as Nokia in Ottawa and OpenText in the Waterloo Region. Tech companies use these clusters to collaborate and compete with one another, thereby accelerating the innovation process in that market. Approximately 28% of high-tech employees in Canada are located in Toronto and another 16% are in Montreal. Vancouver and Ottawa also have significant concentrations at 10% and 5% of established high-tech employees, while the remaining employees are relatively evenly spread through the other six markets.

Similar millennial populations across Canada might make markets appear equal, however top tech markets distinguish themselves with the presence of tech

TECH INDUSTRY OUTLOOK RANKINGS

1. Toronto, ON 2. Vancouver, BC 3. Montreal, QC 4. Calgary, AB 5. Ottawa, ON 6. Waterloo, ON 7. Halifax, NS 8. Edmonton, AB 9. London, ON 10.Winnipeg, MB 1


Tech Analysis conducted in this report includes millennials aged 20-29 years living in cities.

17

FIGURE 5

TOP 10 MARKETS FOR EDUCATIONAL ATTAINMENT

25-64 Years Old, Undergraduate Degree or Higher (2015) City

Labour Force Educational Attainment

Ottawa, ON Toronto, ON Halifax, NS Vancouver, BC Calgary, AB Montreal, QC Winnipeg, MB Edmonton, AB Waterloo Region, ON London, ON Canada

43.4% 38.6% 36.4% 36.3% 35.4% 31.1% 29.8% 29.5% 29.0% 28.3% 28.2% Source: Environics Analytics 2015

FIGURE 6

DEGREES PER CAPITA

Undergraduate Degree or Higher (2015) City

Ottawa, ON Toronto, ON Vancouver, BC Halifax, NS Calgary, AB Montreal, QC Edmonton AB Winnipeg, MB Waterloo, ON London ON

Degrees Per Capita

0.26 0.25 0.25 0.24 0.21 0.20 0.19 0.19 0.19

0.30

Source: Environics Analytics 2015

18


FIGURE 7

WHERE ARE WORKERS COMING FROM AND WHERE ARE THEY HEADED? City

Undergraduate Degree or Higher (2010-2014)*

Jobs Added (2011-2015)

Brain Gain/Drain

58,588 67,565 16,768 24,011 108,746 16,002 104,476 237,670 15,104 70,158

92,200 96,300 22,900 20,500 103,900 9,800 97,300 229,000 5,900 32,700

33,612 28,735 6,132 (3,511) (4,846) (6,202) (7,176) (8,670) (9,204) (37,458)

Calgary, AB Edmonton, AB Waterloo Region, ON Winnipeg, MB Montreal, QC London, ON Vancouver, BC Toronto, ON Halifax, NS Ottawa, ON

Source: Environics Analytics 2015; Statistics Canada May 2016 *Refers to working aged population (25-64 years old), currently residing in each city.

FAST GROWING MARKETS OUT-PACE EDUCATIONAL ATTAINMENT

+33,612 Calgary, AB +28,735 Edmonton, AB

+6,132 Waterloo Region, ON

−3,511 Winnipeg, MB −6,202 London, ON −8,670 Toronto, ON

−37,458 Ottawa, ON

−9,204 Halifax, NS −7,176 Vancouver, BC −4,846 Montreal, QC


19

FIGURE 8

MILLENNIAL POPULATION CHANGE* (2009-2014) by Market

City

Winnipeg, MB Ottawa, ON Halifax, NS London, ON Edmonton, AB Toronto, ON Vancouver, BC Montreal, QC Calgary, AB Waterloo Region, ON

% Change

15.0% 14.9% 11.7% 10.5% 3.3% 3.1% 2.9% 2.8% 2.7% 1.7% * Millennial ages 20-29 Years living in cities/regional municipalities. Source: Environics Analytics, 2015.

FIGURE 9

TOP 10 CONCENTRATED MILLENNIAL MARKETS* (2014) City

Vancouver, BC Edmonton, AB Waterloo Region, ON London, ON Halifax, NS Montreal, QC Ottawa, ON Winnipeg, MB Toronto, ON Calgary, AB

% Change

18.1% 17.7% 17.0% 16.7% 16.3% 15.8% 15.8% 15.6% 15.6% 15.0% * Millennial ages 20-29 Years living in cities/regional municipalities. Source: Environics Analytics, 2015.

20


//

what is a startup city?

While this edition focuses on established tech companies in Canada, any discussion about tech talent requires some mention of the vibrant startup culture that drives this industry. While more difficult to quantify in Canada, today’s startups could become next year’s tech giants. In our analysis of established tech companies, Waterloo does not rank higher than 7th despite making tech history with Blackberry. At its peak, Blackberry employed 11,000 people in Waterloo Region, some of which have relocated since the company’s decline, but there remains an active tech market with nearly 6,000 employees working in established tech companies in 2015. Many displaced employees are leveraging their past experience at the tech giant and are working at startups that do not meet the threshold for reporting by Statistics Canada (1,500*+ employees). The power of this startup community is

reflected in the fact that 22% of office leases in Waterloo were completed by tech companies, many smaller sized yet growing. This sector continues to drive construction and conversion of office towers in downtown Waterloo. While there is much to be gained from analyzing larger tech-companies, as they have the ability to move markets and provide a representative sample of what tech tenants require, it is also important to recognize the next generation of tech talent. Waterloo and other markets, including Ottawa, that did not rank highly in our analysis have the ability to attract, support and incubate the firms that will become well established and help elevate their rankings in future editions of this report.

*As per Labour Force Survey by Statistics Canada, NOC code estimates that fall below the confidentially threshold have been suppressed. Confidentiality threshold as follows: 1,500 employees for ON, AB, BC; 500 employees for NS, MB. © 2016 CBRE Limited

21

//

how do commercial real estate costs impact tech talent?

Employee wages are generally the greatest cost for companies within tech-talent markets. These highlyskilled and educated workers command on average 45% more than average non-tech salaries in Canada. Calgary ranked the highest for average tech worker salary at over $83,000 as salaries remain elevated following a strong energy market performance – approximately $3,500 more than the next highest market, Ottawa. The average tech worker wage in six of the top 10 tech-talent markets is above the Canadian tech worker average.

for unique office space and a spike in rental rates in certain areas. The strongest example of this is Vancouver, which has the highest average office rents followed by Calgary and Toronto. One would expect Calgary rental rates to decline given increasing office vacancy. Despite being the second largest city by population, Montreal has the sixth highest office rent which provides the city with a competitive advantage equal to midsized markets like Edmonton, Ottawa and Halifax.

Office rent is the second highest cost for technology companies, especially those who pursue the benefits of tech clustering and target specific submarkets where office space conversions and character-filled space are located. The result of which is heightened competition

22


FIGURE 10

AVERAGE CANADIAN MARKET TECH EMPLOYMENT BREAKDOWN (2015)

Managers 8% Technology and Engineering Related 18%

Computer Support, Database & Systems 45%

Software Developers and Programmers 29% Source: Statistics Canada, May 2016.


23

FIGURE 11

ESTIMATED 1 YEAR COSTS BY MARKET: WAGE AND RENT OBLIGATION FOR TYPICAL TECH FIRM Typical Tech Firm Estimates: 500 Employees, 75,000 Sq. Ft.

City

Calgary, AB Ottawa, ON Edmonton, AB Toronto, ON Vancouver, BC Waterloo Region, ON Montreal, QC London, ON Halifax, NS Winnipeg, MB

Rent Cost

Tech Talent Wages Support Non-Tech Wages Management Wages

(Avg Rent x 75,000 SF) (Avg. Wage x 250 People)

$2,677,593 $2,433,000 $2,493,000 $2,546,695 $2,983,420 $1,640,271 $2,382,750 $1,772,250 $2,056,500 $1,765,500

$20,825,810 $19,931,612 $18,843,923 $18,541,305 $18,089,059 $18,024,193 $17,061,090 $17,599,680 $16,361,312 $16,073,539

(Avg. Wage x 213 People) (Avg. Wage x 37 People)

$12,914,725 $12,193,641 $12,102,605 $11,446,346 $10,368,271 $10,131,366 $10,294,662 $9,450,480 $9,870,529 $9,511,786

$3,357,759 $3,670,672 $2,999,344 $3,502,094 $3,404,379 $3,445,214 $3,214,169 $3,357,759 $3,355,894 $3,357,759

Total Estimated Cost

$39,775,886 $38,228,926 $36,438,872 $36,036,440 $34,845,129 $33,241,044 $32,952,671 $32,180,169 $31,644,235 $30,708,583

Source: Statistics Canada, May 2016; CBRE Research (Metro Area), Q2 2016.

24



25

//

how does tech talent impact commercial real estate?

Real Estate Outlook High-tech companies are the top drivers of office leasing activity in Canada. Fueled by the addition of over 32,000 new tech jobs over the past five years, their national share of major leasing topped 2.0 million sq. ft. or 16.1% of all significant office leases1 in 2015. Many tech-talent markets, especially those with high concentrations or clusters of tech companies, have seen rising rents and declining vacancies as a result. Toronto’s downtown office market has emerged as one of the best performing in North America with vacancy dipping to a low 4.9% in Q2 2016.

apartment, according to the Canadian Mortgage and Housing Corporation, five of the top 10 markets have a cost of living above the Canadian national average. Comparing the annual average apartment rent to the annual average tech-worker wage in each market, even among the most expensive markets, tech wages are able to cover the high cost of living based on standard affordability measures which suggest allocating no more than 30% of income to housing.

The migration of talent to tech markets also has a profound effect on residential real estate. Although Vancouver is the most expensive market to rent an

1

26

Includes top 25 largest transactions by sq. ft. each quarter for the markets tracked by CBRE Research.


FIGURE 12

% TECH OF TOTAL SIGNIFICANT LEASE ACTIVITY (2015) City

Tech % of Total

Ottawa, ON Vancouver, BC Waterloo Region, ON Montreal, QC Toronto, ON Halifax, NS London, ON Calgary, AB Edmonton, AB Winnipeg, ON Canada

47.4% 28.5% 21.9% 20.8% 12.3% 11.3% 6.1% 1.8% 0.0% 0.0% 16.1%

Source: CBRE Research (Office Market), Q2 2016.


REAL ESTATE MARKET OUTLOOK RANKINGS 1. Vancouver, BC 2. Toronto, ON 3. Ottawa, ON 4. Calgary, AB 5. Halifax, NS 6. Edmonton, AB 7. Waterloo, ON 8. London, ON 9. Winnipeg, MB 10. Montreal, QC

27

Office tenants and investors can gain competitive advantage when formulating talent and real estate strategies: • Top-ranked tech-talent markets are rich environments for innovation and talent attraction, a status that feeds upon itself and grows larger over time. • Know where the momentum and up-and-coming markets are located, and how their unique characteristics can benefit your growth strategy. • Identify which markets produce, attract and retain the most new tech talent. • Identify surplus talent production markets that could be fertile ground for recruitment or establishment of new office locations. • Millennial preferences for work and living locations and experiences are major drivers of tech-talent flow and ultimately innovation. • Understanding market-by-market operating cost differences and tech talent pool composition helps fortify location decisions. Tech-talent flows are greatest into markets with the most opportunity for career growth, innovation and compensation. • Real estate investors would be well-positioned to diversify their portfolios by following tech-talent trends.

28


FIGURE 13

FIGURE 14

OFFICE ASKING RENT BY MARKET (Q2 2016) City

Vancouver, BC Calgary, AB Toronto, ON Edmonton, AB Ottawa, ON Montreal, QC Halifax, NS London, ON Winnipeg, MB Waterloo Region, ON

PURPOSE-BUILT APARTMENT ASKING RENT BY MARKET (2015)

Annual Gross Direct Asking Rent Per SF

Vacancy Rate

$39.78 $35.70 $33.96 $33.24 $32.44 $31.77 $27.42 $23.63 $23.54 $21.87

11.2% 21.6% 9.4% 13.4% 10.7% 13.3% 14.9% 17.1% 9.8% 13.5%

City

Average Purpose-Built Apartment Rent

Vacancy Rate

$1,268 $1,210 $1,160 $1,137 $1,084 $977 $926 $925 $861 $738

0.8% 1.6% 5.3% 4.2% 3.4% 3.4% 2.4% 2.9% 2.9% 4.0%

Vancouver, BC Toronto, ON Calgary, AB Edmonton, AB Ottawa, ON Halifax, NS Waterloo Region, ON Winnipeg, MB London, ON Montreal, QC

Source: CBRE Research Q2 2016.

Source: CMHC 2015.

FIGURE 15

APARTMENT RENT-TO-TECH WAGE RATIO City

Vancouver, BC Toronto, ON Edmonton, AB Halifax, NS Winnipeg, MB Calgary, AB Ottawa, ON Waterloo Region, ON London, ON Montreal, QC

Annualized Apartment Rent

2015 Average Annual Tech Wage

Rent-to-Tech Wage Ratio

$15,214 $14,514 $13,641 $11,721 $11,103 $13,920 $13,011 $11,115 $10,329 $8,859

$72,356 $74,165 $75,376 $65,445 $64,294 $83,303 $79,726 $72,097 $70,399 $68,244

21.0% 19.6% 18.1% 17.9% 17.3% 16.7% 16.3% 15.4% 14.7% 13.0%

Source: CBRE Research Q2 2016; CMHC 2015.

*Tech users typically concentrate within submarkets that experience higher demand and thus lower vacancy relative to the overall market.


29

30


//appendix


A1

//1 Toronto, ON EMPLOYMENT BREAKDOWN Employment Growth 2015 2010-15

SCORE

83.94 TECH INDUSTRY INDICATORS

Average Growth Wage 2010-15

TOTAL TECH OCCUPATIONS Software Developers/Programmers Computer Support, Database & Systems Computer & Infor. Systems Managers Technology Engineering-Related

179,200 52,500 81,000 17,200 28,500

35.6% 45.8% 27.4% 48.3% 35.7%

$73,356 $76,177 $70,557 $94,654 $65,239

12.6% 15.0% 10.6% 20.3% 360.0%

TOTAL NON-TECH OCCUPATIONS Sales Administrative & Office Support Business Operations & Finance

285,400 26,800 161,500 97,100

4.6% 7.2% -7.4% 32.3%

$53,739 $58,242 $41,287 $73,205

18.9% 8.0% 10.8% 19.6%

#1

#3

TECH TALENT

EDUCATION RANKING

RANKING

#1

#2

TECH INDUSTRY OUTLOOK

REAL ESTATE OUTLOOK

RANKING

RANKING

Source: Statistics Canada LFS (NOCs), May 2016.

POPULATION TRENDS

EDUCATIONAL ATTAINMENT

Age Group 0-9 Years 10-19 Years 20-29 Years 30-39 Years 40-49 Years 50-59 Years 60-69 Years 70+ Years

% Change 4.5% -3.4% 7.3% 7.7% -3.5% 16.0% 24.3% 15.5% -50000 -25000

0

25000 50000 75000 100000 125000 Source: Environics Analytics, 2015.

38.6%

BACHELOR’S DEGREE OR HIGHER 25-64 Year Olds Source: Environics Analytics, 2015.

TECH TALENT DIVERSITY

OFFICE RENT & VACANCY TRENDS* $36

11%

$35

10%

$34

9%

$33

8%

23%

MALE

FEMALE

77%


Gross Rent ($) Vacancy (%)

$32 $31

7%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011

2012

2013

2014

2015

APARTMENT COSTS

6%

2016

Source: CBRE Research (Office Market), Q2 2016. *Tech users typically concentrate within submarkets that experience higher demand and thus lower vacancy relative to the overall market.

AVERAGE APT. RENT: $1,210 PER UNIT/MO. 16% INCREASE SINCE 2010 Source: CMHC 2015.

Back to Scorecard Rankings A2


//2 Vancouver, BC EMPLOYMENT BREAKDOWN Employment Growth 2015 2010-15 TOTAL TECH OCCUPATIONS Software Developers/Programmers Computer Support, Database & Systems Computer & Infor. Systems Managers Technology Engineering-Related TOTAL NON-TECH OCCUPATIONS Sales Administrative & Office Support Business Operations & Finance

SCORE



57,500 20,900 21,100 5,400 10,100

50.1% 64.6% 68.8% 17.4% 18.8%

$72,356 $76,177 $64,378 $92,010 $70,608

10.1% 13.0% 4.4% 11.8% 17.1%

110,000 11,200 69,800 29,000

13.9% 16.7% 12.9% 15.1%

$48,377 $56,367 $41,799 $62,262

11.9% 15.0% 6.6% 20.9%

#3

#2

TECH TALENT

EDUCATION RANKING

RANKING

#2

#1


REAL ESTATE OUTLOOK

RANKING

RANKING



POPULATION TRENDS Age Group 0-9 Years 10-19 Years 20-29 Years 30-39 Years 40-49 Years 50-59 Years 60-69 Years 70+ Years

% Change 5.1% -4.0% 4.9% 10.3% -4.6% 10.6% 23.7% 17.6% -20000

0

20000

40000

60000

Source: Environics Analytics, 2015.

36.3%




14%

$38

12%

$34

10%

$30 $26

8%

Gross Rent ($) Vacancy (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011

2012

2013

2014

2015

18%

MALE

FEMALE

82%


APARTMENT COSTS

6%

2016


AVERAGE APT. RENT: $1,250 PER UNIT/MO. 14.5% INCREASE SINCE 2010 Source: CMHC 2015.

Back to Scorecard Rankings © 2016 CBRE Limited

A3

//3 Ottawa, ON

SCORE

61.26

EMPLOYMENT BREAKDOWN Employment Growth 2015 2010-15

TECH INDUSTRY INDICATORS Average Growth Wage 2010-15


65,400 19,500 30,500 6,400 9,000

9.2% -12.9% 16.0% 28.0% 45.2%

$79,726 $80,428 $75,727 $99,207 $77,905

11.3% -0.8% 12.4% 18.0% -0.8%


65,000 4,800 36,700 23,500

-7.4% 26.3% -9.2% -9.6%

$57,247 $64,996 $44,359 $75,792

10.8% 23.5% 8.3% 11.2%

#4

#1

TECH TALENT

EDUCATION RANKING

RANKING

#5

#3


REAL ESTATE OUTLOOK

RANKING

RANKING




% Change 5.4% -6.2% 11.0% 5.2% -6.5% 12.2% 21.3% 15.5% -10000

0

10000

20000 Source: Environics Analytics, 2015.

43.4%




14%

$32

12%

$30

10%

$28 $26

8%


2012

2013

2014

2015

27%

MALE

FEMALE

73%


APARTMENT COSTS

6%

2016





//4 Montreal, QC EMPLOYMENT BREAKDOWN

SCORE


Employment Growth 2015 2010-15



112,900 28,500 55,700 6,900 21,800

26.0% 26.1% 31.1% 15.0% 17.8%

$68,244 $65,318 $66,706 $89,869 $70,104

14.7% 16.8% 14.9% 5.8% 17.1%


177,900 15,100 112,400 50,400

0.0% 7.9% -3.6% 6.6%

$48,332 $48,646 $39,831 $67,196

13.1% 9.2% 10.6% 14.3%

#2

#8

TECH TALENT

EDUCATION RANKING

RANKING

#3

#10


REAL ESTATE OUTLOOK

RANKING

RANKING




% Change 11.6% -8.6% 5.5% 10.4% -4.5% 8.3% 13.9% 13.9% -40000

-20000

0

20000

40000

60000


31.1%




14%

$32

12%

$30

10%

$28 $26

8%


2012

2013

2014

2015

20%

MALE

FEMALE

80%


APARTMENT COSTS

6%

2016


AVERAGE APT. RENT: $738 PER UNIT/MO. 8.8% INCREASE SINCE 2010 Source: CMHC 2015.


A5

//5 Calgary, AB

SCORE

50.37




37,400 10,400 13,400 3,400 10,200

19.1% 11.8% -2.2% 47.8% 67.2%

$83,303 $84,377 $78,404 $81,063 $89,392

21.4% 17.9% 13.0% N/A 43.5%


64,500 5,500 39,300 19,700

-2.3% 7.8% -3.4% -2.5%

$60,633 $68,504 $51,026 $77,599

15.7% 18.3% 14.7% 16.0%

#5

#7

TECH TALENT

EDUCATION RANKING

RANKING

#4

#4


REAL ESTATE OUTLOOK

RANKING

RANKING




% Change 19.9% 7.7% 7.6% 19.8% 6.3% 16.8% 40.2% 21.0% 0

12500

25000

37500

50000


35.4%




26%

$42

22%

$38

18%

$34

14%

$30

Gross Rent ($) 10% Vacancy (%)

23%

MALE

FEMALE

77%


$26


2012

2013

2014

2015

APARTMENT COSTS

6%

2016





//6 Halifax, NS

SCORE

34.19




12,000 2,600 5,800 1,000 2,600

50.0% 23.8% 41.5% 66.7% 116.7%

$65,445 $66,171 $62,286 $90,700 $62,052

18.1% 11.4% 16.7% N/A N/A


21,800 2,300 13,400 6,100

7.9% 53.3% -8.2% 48.8%

$46,341 $48,908 $37,856 $64,011

16.1% -1.5% 15.7% 3.4%

#8

#4

TECH TALENT

EDUCATION RANKING

RANKING

#7

#5


REAL ESTATE OUTLOOK

RANKING

RANKING




% Change 1.9% -14.6% 2.8% 4.7% -11.1% 7.8% 19.2% 14.5% -10000

-5000

0

5000

10000


36.4%




20%

$28

16%

$26

12%

$24

8%

23%

MALE

FEMALE

77%



$22 $20

4%


2012

2013

2014

2015

APARTMENT COSTS

0%

2016




A7

//7 Edmonton, AB EMPLOYMENT BREAKDOWN Employment Growth 2015 2010-15

SCORE




21,700 4,900 9,700 1,600 5,500

13.6% 19.5% 3.2% 60.0% 19.6%

$75,376 $72,132 $75,858 N/A $77,414

9.8% 6.0% 10.1% N/A N/A


56,600 5,700 3,400 16,900

11.2% 7.5% -3.1% 61.0%

$56,820 $69,250 $46,887 $72,611

14.9% 13.2% 5.9% 19.3%

#6

#5

TECH TALENT

EDUCATION RANKING

RANKING

#8

#6


REAL ESTATE OUTLOOK

RANKING

RANKING




% Change 20.8% 2.9% 10.5% 25.3% 1.2% 15.0% 33.9% 17.0% 0

12500

25000

37500

50000


29.5%




26%

$34

22%

$32

18%

$30

14%

$28

Gross Rent ($) 10% Vacancy (%)

22%

MALE

FEMALE

78%


$26


2012

2013

2014

2015

APARTMENT COSTS

6%

2016





//8 Waterloo Region, ON EMPLOYMENT BREAKDOWN Employment Growth 2015 2010-15 TOTAL TECH OCCUPATIONS Software Developers/Programmers Computer Support, Database & Systems Computer & Infor. Systems Managers Technology Engineering-Related TOTAL NON-TECH OCCUPATIONS Sales Administrative & Office Support Business Operations & Finance

SCORE

32.52


7,100 4,600 2,500 N/A N/A

108.8% 35.3% N/A N/A N/A

$70,968 $72,516 $68,121 N/A N/A

4.2% 6.5% N/A N/A N/A

15,000 2,100 10,200 2,700

11.1% 40.0% 6.3% 12.5%

$47,565 $59,472 $39,971 $66,992

8.6% 14.9% 8.0% 1.5%

#7

#9

TECH TALENT

EDUCATION RANKING

RANKING

#6

#8


REAL ESTATE OUTLOOK

RANKING

RANKING




% Change 4.3% -5.4% 4.2% 4.6% -6.3% 13.4% 22.5% 15.0% -5000

0

5000

10000 Source: Environics Analytics, 2015.

29.0%




20%

$24

16%

$22

12%

$20

8%

16%

MALE

FEMALE

84%

Source: Statistics Canada, May 2016. Gross Rent ($) Vacancy (%)

$18 $16

4%


2012

2013

2014

2015

APARTMENT COSTS

0%

2016




A9

//9 Winnipeg, MB EMPLOYMENT BREAKDOWN Employment Growth 2015 2010-15

SCORE




10,300 2,600 6,000 N/A 1,700

58.5% 13.0% 42.9% N/A N/A

$64,294 $65,197 $64,458 N/A 62,335

8.1% 4.4% 11.5% N/A N/A


29,100 1,800 20,700 6,600

-12.1% -14.3% -18.2% 15.8%

$44,656 $51,831 $37,772 $64,290

13.5% 19.0% 8.4% 11.1%


#9

#10

TECH TALENT

EDUCATION RANKING

RANKING

Age Group 0-9 Years 10-19 Years 20-29 Years 30-39 Years 40-49 Years 50-59 Years 60-69 Years 70+ Years


0

5000

RANKING

RANKING

% Change 8.4% -4.3% 11.1% 11.7% -7.4% 8.2% 23.2% 8.6% -5000

REAL ESTATE OUTLOOK


POPULATION TRENDS

-10000

#9

#10

10000

15000

20000


29.8%




20%

$24

16%

$22

12%

$20

8%

20%

MALE

FEMALE

80%



$18 $16

4%


2012

2013

2014

2015

APARTMENT COSTS

0%

2016





//10 London, ON EMPLOYMENT BREAKDOWN Employment Growth 2015 2010-15 TOTAL TECH OCCUPATIONS Software Developers/Programmers Computer Support, Database & Systems Computer & Infor. Systems Managers Technology Engineering-Related TOTAL NON-TECH OCCUPATIONS Sales Administrative & Office Support Business Operations & Finance

SCORE



3,100 1,500 1,600 N/A N/A

-38.0% -21.1% -48.4% N/A N/A

$70,399 N/A $70,399 N/A N/A

18.8% N/A 23.7% N/A N/A

12,500 N/A 10,000 2,500

-2.3% N/A -11.5% N/A

$44,368 N/A $38,415 $68,181

23.7% N/A 10.3% N/A

#10

TECH TALENT

#6

EDUCATION RANKING

RANKING

#9

TECH INDUSTRY OUTLOOK RANKING

#7

REAL ESTATE OUTLOOK RANKING



% Change 3.9% -11.0% 7.7% 7.4% -12.4% 9.2% 17.7% 13.4% -10000

-5000

0

5000


20%

$25

18%

$24

16%

$23

14%

$22

12% Gross Rent ($) Vacancy (%) 10%

$21


2012

2013

2014

28.3%


10000


$20


2015

APARTMENT COSTS AVERAGE APT. RENT: $861 PER UNIT/MO. 9.2% INCREASE SINCE 2010 Source: CMHC 2015.

8%

2016



A11

//

contacts

To learn more about CBRE Research or to download our reports, visit cbre.com/research. Additional Canada research produced by CBRE Research can be found at www.cbre.ca/canadaresearch. FOR MORE INFORMATION REGARDING CBRE RESEARCH, PLEASE CONTACT:

Raymond Wong Director of Research, Canada + 1416 815 2353 [email protected] Christina Cattana Senior Research Analyst +1416 847 3255 [email protected]

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 make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE Limited clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE Limited.