Steve Ladurantaye

Bill Doyle is going down market.

After fending off accusations that that his company wasn’t Canadian enough, the chief executive officer of Potash Corp. of Saskatchewan Inc. has become a property owner in the province again – part of the company’s so-called “Pledge to Saskatchewan,” made during its defence against BHP Billiton Ltd.’s hostile takeover bid. But this time, there is no mansion along the South Saskatchewan River for Mr. Doyle, who is one of Canada’s wealthiest CEOs.

Read the story and comments in the Globe and Mail

Instead, he has opted for a 1,000-square-foot condo in a 27-year-old building in Saskatoon, which he bought days after BHP’s $38.6-billion deal was turned away by the federal government. The estimated value of the property: $308,000, according to the city’s land titles registry.

The transaction allowed the Chicago native to stand before the Saskatoon’s chamber of commerce last week and proclaim himself a citizen of the city, as he reiterated a series of promises to the provincial government that included the relocation of several senior executives from Chicago to Saskatoon before the end of March.

The pledge was made in October as the company waged a public relations battle with Australia-based BHP, and included a promise to hire more workers in the city as well as continue donating to local causes. It helped secure an ally in Premier Brad Wall, who became the harshest critic of the takeover.

While the city’s tax registry states that Potash Corp. is responsible for the property taxes, senior director of corporate and government relations Tom Pasztor said the money is coming out of Mr. Doyle’s pockets.

Mr. Doyle earned $9.6-million in 2009, including stock and options, according to Potash’s most recent annual report.

“Because he travels 200 days a year, he pays in advance, and he does that by paying the money to his secretary,” Mr. Pasztor said. “Whether it’s taxes, phone or cleaning he doesn’t want to come back to the condo and find himself in arrears. It just works out best to stay on top of his bill payments this way.”

Mr. Doyle first needed a place to live in Saskatoon in 1999. He had just been appointed CEO of Potash Corp. of Saskatchewan, and agreed with the company’s board when it suggested he could better do the job if he moved from Chicago. He built a 6,000-square-foot mansion on the banks of the South Saskatchewan.

His residency didn’t last, however, as he moved his family back to the more familiar Chicago within a few years – a decision that remained a sore point for years with provincial politicians. He has maintained a rental in Saskatoon since then, the company said.

This time, his ambitions were scaled down – rather than finance another massive residential project, he bought the comparatively small condo to live in while he’s in Saskatoon. Given his heavy travel schedule and the fact that his three children are grown, Mr. Pasztor said, the condo made sense.

The sale was conducted privately, so it was not listed on the Multiple Listing Service. The deal closed in mid-November. The last time the condo was sold through the MLS – in 2000 for $114,900 – the condo was described as an “immaculate eighth floor unit overlooking the Saskatchewan River … very bright unit, with a living room large enough for a hide-a-bed.”

Mr. Doyle’s former Saskatoon home – with six bedrooms, seven bathrooms, a wine room and multilevel terraces leading down to the river – sold in 2004 for $2-million at a time when the average home was changing hands for just over $100,000.

Saskatoon has been one of the hottest real estate markets in the country over the last decade. ReMax reported recently that house prices increased 9.2 per cent on an annually compounding basis over the last decade, as the province’s resource boom fuelled strong economic growth.

“Investors should return to [Saskatoon] in increasing numbers next year, snapping up well-priced condominium and single-family properties,” the brokerage said in its 2011 outlook.

The city’s housing market is still relatively inexpensive compared with other Canadian cities, with the average resale price hovering around $301,000 in January. The national average was closer to $350,000, according to the Canadian Real Estate Association.

Almost 10 years after Mr. Doyle’s mansion sale caused a stir for its million-dollar-plus price tag, there’s no shortage of luxury available to those looking for a higher-end home in Saskatoon – there are 14 listed for more than $1-million on the MLS, including a 7,000-square-foot waterfront estate listed for $2.5-million.

There are a few moments of quiet panic as I consider how to pay for lunch. After two hours with Melanie Aitken, Canada’s Competition Commissioner, I’m particularly aware of the burden that using a premium credit card will place on the owner of this small restaurant in the Byward Market.

The card comes with higher processing charges for the businesses that run it through their machines. But if I lay it down, the restaurant has no choice but to accept it. Those are the rules set by Visa and MasterCard – rules that Ms. Aitken is taking aim at in her latest crusade as the country’s competition watchdog.

I get where she’s coming from and feel a pang of guilt – but my points card is the only plastic in my wallet.

Read the story in the Globe and Mail

As I subtly slip the card into the hands of a passing waiter, it occurs to me that I’m probably not the first person to worry about how he is perceived by Ms. Aitken. In the last year, she has taken advantage of the new U.S.-style powers granted to her office to pursue some of the country’s biggest companies and trade organizations.

Some would say Ms. Aitken takes a rather American approach to the job. While former commissioners have kept a low profile, Ms. Aitken is fighting many of her battles in the public eye, the way many U.S. prosecutors and regulators do. She issues scathing letters that are as much about educating consumers as they are about warning companies to change their behaviour.

Just as industry watchers were ready to write the bureau off as ineffective, Ms. Aitken has forced it into the limelight and to the forefront of Canadian business. She took on the Canadian Real Estate Association over the way it charges consumers who want their houses listed on its Multiple Listing Service and lambasted Rogers Communications Inc. over ads that claimed its network had fewer dropped calls than others.

More recently, she has been locked in an increasingly heated fight with Visa and MasterCard over the way they force merchants to accept points cards that carry fees that can be as high as 3 per cent of a total purchase. Many non-premium cards charge only 1 per cent.

“I must say I get a real charge out of when we do something with a real public impact,” she says. “People quite often don’t get the details of what I’m doing, but they do get that I’m fighting for them.”

Ms. Aitken, 44, came to the bureau after being seconded to the Justice Department from law firm Davies Ward Phillips & Vineberg LLP to work on competition files. It didn’t take long for her to begin her ascent – within two years she was heading the bureau’s merger division, which would be thrust into the spotlight after a federal judge slammed the agency for overstepping its bounds when investigating the Labatt Brewing Co. Ltd. takeover of Lakeport Brewing in 2008.

An independent review exonerated Ms. Aitken’s department, but big changes were imminent. Parliament handed the bureau sweeping new powers in 2009. Ms. Aitken was now Commissioner, and given an opportunity to transform the bureau from a toothless regulator into a market force capable of challenging takeovers or business practices that threatened competition.

In Ms. Aitken – a litigator who misses the days when she took on large corporations in a courtroom – the bureau found a leader who is willing to become a prominent and outspoken player in Canada’s business community.

“A very significant part of what changed at the bureau when I came in is we got better tools,” she says. “We were given an effective, coherent framework that we didn’t have before. That signal from Canadians was pretty clear and I feel a real responsibility to discharge on that.”

The laws may have changed – she can now suspend proposed takeovers by up to a year to investigate them further and levy penalties as large as $25-million for anticompetitive behaviour, such as price fixing – but there’s little doubt that Ms. Aitken’s personality is just as responsible for the agency’s increased visibility as any bit of legislation.

She has an unforgiving – although self-imposed – work schedule that starts after an early morning run along the Rideau Canal and doesn’t end until well after the sun has gone down. While she works in Gatineau, just across the river from Ottawa, she flies to Toronto every weekend to be with her six-year-old son, Jake.

It’s a punishing pace and her personal expectations are set high. She is bilingual after taking French training at 40, but prefers not to speak it because she’s just better at English. She doesn’t see the point of running a marathon because “Really, at the end of the day what have you actually accomplished?”

She acknowledges her demands and expectations can take a toll on the 400-plus employees who answer to her. Like any government agency, not every bureaucrat is there because of a deep personal commitment to the department’s mandate.

“What can I say? I expect a lot,” she says, picking at a salad she ordered as a safe meal after a bout of food poisoning brought on by dried apricots (she uses the same excuse when I suggest ordering the four-martinis-for-$40 deal).

“I appreciate that different people come to their day with different expectations of what it will hold. But I think Canadians deserve to have their public servants working very effectively and strongly – I expect that.”

Instead of diving into the meal, she tries to explain why she gets so animated when talking about credit card fees. Visa and MasterCard say that forcing merchants to accept all manner of points cards ensures that consumers can use their plastic wherever they want. She sees it differently, suggesting they want to preserve the $5-billion they collect from merchants each year in extra fees.

Consumers may love racking up the free points that eventually lead to flights and gift certificates, but she says small business owners and their customers are the unwitting financiers of the bonus schemes.

“Even if you pay cash, you’re funding my points because the price of the good will have gone up because the merchant needs to recover their costs,” she says. “To me, that’s not transparent; those are hidden fees.”

That said, as someone who flies tens of thousands of kilometers a year, she understands the allure of freebies. When asked if she has a points card in her wallet, she blushes and laughs. Her carefully worded answer is very lawyerly indeed.

“I actually do,” she says. “But like a lot of consumers, I had no idea before we did this investigation about the higher costs associated with them … if I’m at a small entrepreneurial store, I’d never use my points card. I just don’t believe that system should be working under anticompetitive restraints. So I’m not going to feed the problem.”

And with that, the prosecution rests its case.

When Imperial Tobacco Canada Ltd. decided to sell its Montreal headquarters, pessimists may have wondered who would want to invest in an older building outside the downtown business district.

But after years of being overlooked in favour of Toronto and Vancouver, investors are rediscovering Montreal, once the centre of Canada’s financial industry. The city’s burgeoning technology sector, along with established aerospace and pharmaceutical industries, have helped to push down office vacancies and send rents higher for the first time in years.

Read the story in the Globe and Mail

Despite stubborn unemployment (8.2 per cent in January, compared with 7.8 per cent nationally), and rental rates that are as much as $10 a square foot less than Toronto and Vancouver, Montreal’s real estate market is on the verge of expansion. For the first time since 1992, private developers are staking claim to sites and aggressively seeking the anchor tenants they need to build new office towers.

CB Richard Ellis is to announce Wednesday that the Imperial Tobacco building has been sold to real estate investor Groupe Mach Inc. for $24-million, in a sale-leaseback deal that will see the tobacco giant remain as the primary tenant of the building.

“Perhaps the most noteworthy aspect of the transaction was the depth of interest shown by local and non-local institutional investors for a non-core, value-add investment opportunity at low initial yields,” said CBRE executive vice-president Brett Miller.

There were 979 commercial real estate deals in Montreal in 2010, CBRE said, worth $2.9-billion. That was a 52-per-cent increase over 2009, and tied the city for second place, by dollar volume, with Vancouver, despite having several hundred fewer deals.

The interest is stoked by renewed life in the leasing market. In the fourth quarter, more than 224,000 square feet in Montreal were absorbed by tenants after a year of increasing vacancies. Cushman Wakefield estimates overall vacancy rates at 9.2 per cent, but said almost 500,000 square feet of space is likely to be leased in 2011.

The national average vacancy rate was 8.6 per cent at the end of the year, according to Avison Young.

Montreal’s skyline could also see new towers within the next several years: Six office towers have been approved by the city and are ready to start construction, but none will break ground until an anchor tenant signs a lease. The developers are keen to draw new tenants to Montreal.

The most recent project came last week when the real estate arm of the Caisse de dépôt et placement du Québec said it would partner with a private developer to build a 477,000-sq.-ft. office tower in the downtown core.

Established companies may also decide to build new sites as they expand, or look to renovate existing facilities. Rio Tinto Alcan, for example, said last week that it is exploring partnering with a builder rather than spending up to $50-million to expand its existing downtown campus.

“You are finally starting to see rents go up, and the pricing on new construction is beginning to look justifiable,” said Louis Burgos, senior managing director at Cushman Wakefield.

Avison Young’s Quebec chairman Stephen Leopold said the city is on the cusp of reinventing itself as a major producer of green energy, and its “undervalued” properties are key to its future.

“There is a real sense of optimism that is starting to bubble beneath the surface of the new Montreal,” he said. “The new Montreal is an awakening lion. We are the second largest city in Canada and have the western world’s most unlimited supply of renewable energy. You don’t need a PhD to figure out what this will mean to Montreal’s new economy and its real estate prospects.”

When the more than one million residents of Campinas, Brazil go shopping, they wander open-air markets and visit a smattering of outdoor strip malls. Despite a swelling middle class, the bustling industrial region about an hour outside of capital Sao Paulo has very little indoor retail space. The lack of a proper shopping mall is the kind of thing that Pierre Lalonde dreams about when trying to decide where to invest Ivanhoe Cambridge’s money.

Ivanhoe Cambridge–the real estate arm of the that specializes in retail space–has about $700 million invested in shopping malls in the South American country and isn’t averse to increasing that amount. Indeed, Lalonde is in Campinas this week to get work started on a new project.

Read on the Business Without Borders site

The company is one of a handful of Canadian real estate companies that are together sinking billions of dollars into Brazil, betting that the country’s highly fragmented real estate industry is ready to be consolidated and professionally managed after decades of underdevelopment. They think that Brazil in 2011 is similar to Canada in the 1970s, and that with the right partners Canadian companies will be able to earn outsized returns on their investments that would not be available here.

“There’s a void in that market and we were able to get some land and will start construction soon,” said Lalonde, who is senior vice-president of portfolio management and strategic planning for the Montreal-based real estate company. “Canada is our core market where we developed our expertise, and now we can apply that to countries such as Brazil.”

Brazil has one of the strongest consumer cultures in the world, with citizens among the largest spenders on the planet. Its citizens are already the world’s fourth-biggest consumers of apparel and cosmetics, despite a wide gap between the rich and the poor.

By 2050, PricewaterhouseCooper estimates, it will be among the top three consumer markets on the planet. Yet there are still sizable cities such as Campinas without the large indoor shopping centres commonly associated with the middle class, because the investment climate hasn’t allowed developers access to the money they need to build modern malls.

“From a Canadian perspective, Brazil has really got things under control recently,” said Vanessa Iarocci, vice-president of deals at PwC. “It’s got a handle on inflation and its currency, it’s a net exporter of energy and it has made a lot of progress in the last decade compared to other markets, such as China and India. If you’re coming from the Canadian market, it actually looks quite familiar.”

Indeed, Brazil has a lot going for it–inflation has stabilized since the mid-1990s, it saw its first budget surplus in 1998, and reached investment grade status in 2008.

There’s one key difference between Brazil and Canada, however, and that’s where the opportunity lies. Interest rates in Brazil are more than 11%, which has made it almost impossible for local developers to finance development over the last decade because loans are too expensive.

“Brazilian real estate is still in its infancy,” said Peter Ballon, vice-president and head of real estate investments for the . “There is a lot of pent-up demand across all real estate sectors, and there is still a shortage of capital. We expect the opportunities to be significant, and that we will invest a significant amount of capital there in the next several years.”

CPPIB has already committed up to $250 million in a joint venture with Cyrela Commercial Properties SA, a local partner that develops office buildings, shopping malls and logistics facilities.

While the pension funds have only been investing in Brazil over the past decade, has been active in the country for decades. Today, it has more than $10.6 billion of real estate in Brazil, covering residential, office and retail space. And while it is entrenched enough to act alone, most newcomers to the country prefer to enlist a local partner to help defray the risk and understand local markets.

“There are [Brazilian] entrepreneurs that just can’t do it on their own,” Ballon said. “They could grow at a very slow pace, but the opportunity is now and we can accelerate the growth with long-term investments. The returns are good, and having a solid partner helps to manage risk.”

There are plenty of reasons for caution. PwC warned in a recent report–intended to encourage Canadian companies to consider increasing their merger-and-acquisition activities in the country–that the murder rate was 12 times higher than in Canada, “raising the risk that companies will lose key employees.”

The report lists other challenges, such as powerful trade unions, a complex tax system and “corruption issues typical of a developing country.” “When I wrote the report, I called my colleague in Brazil to see how he would react to those warnings,” Iarocci said. “He was fine with it–and that’s why we tell companies we are working with that they never want to do it alone; you want to involve the Brazilians.”

There’s also the risk of coming too late to the party. While vacancy rates in office towers are notoriously low – some key cities have absolutely no vacancies to speak of–a surge of activity over the next three years is expected to have a major effect on vacancy rates. The Faria Lima district in Sao Paulo has a vacancy rate of 0.4% cent, but will see its office space increase by 40% in the next three years. Lease rates have increased by 17% in the last year.

The new space will draw from older buildings in the region, said Colliers International research co-ordinator Leandro Angelino, because companies “seek the benefits caused by corporate visibility and the glamour of the region.” That will open up retrofit opportunities in outlying areas, however, and that’s where Canadian capital could best be put to work.

“From the very long-term perspective, this sort of market is ideal for pension funds,” CPPIB’s Ballon said.

So what does a $17.5-million mansion look like? The Toronto home that recently fetched that price is 15,000 square feet and backs onto the Rosedale Golf Course. The selling agents were from Chestnut Park, the buying agents were from Sotheby’s International Realty Canada.

Here’s the brochure. You’re too late to buy it, though.