There is significant room for other types of riders: students, tourists and people with “atypical schedules,” CEO Charles Emond said.
Author of the article:Frédéric Tomesco
Publishing date:Aug 18, 2021 •
Internal studies show travel between home and the workplace will probably represent 40 to 50 per cent of all trips on the REM, Caisse CEO Charles Emond says.
PHOTO BY DAVE SIDAWAY /Montreal Gazette
Teleworking may initially cut ridership on the future Réseau express métropolitain by about 10 per cent, though that shouldn’t be enough to erase the project’s financial appeal, the light-rail system’s main backer said.
Working from home has gone mainstream since the start of the COVID-19 pandemic, leading several companies to scale back their office-space needs after multiple employee polls showed teleworking’s strong popularity.
Teleworking may initially cut ridership on the future Réseau express métropolitain by about 10 per cent, though that shouldn’t be enough to erase the project’s financial appeal, the light-rail system’s main backer said.
Working from home has gone mainstream since the start of the COVID-19 pandemic, leading several companies to scale back their office-space needs after multiple employee polls showed teleworking’s strong popularity.
Although plans are afoot in Montreal and elsewhere to start bringing back workers after Labour Day, many real-estate analysts and executives predict remote work will remain a key part of corporate life long after the pandemic has ended.
“We can estimate that at the start, the impact (of remote work) could be about 10 per cent” on ridership, Caisse de dépôt et placement du Québec chief executive Charles Emond told reporters Wednesday on a video conference. “We could be in this period for a while, with teleworking.”
Quebec’s public pension manager is building the REM via its CDPQ Infra unit. It also plans to run the system once operations begin late next year.
When completed, the $6.9-billion network — Montreal’s largest transit project since the inauguration of the métro in 1966 — will link the South Shore to Central Station over the Champlain Bridge. Other phases will come online in the ensuing two years, with links to Deux-Montagnes, Trudeau airport and Dorval, Pointe-Claire, Kirkland and Ste-Anne-de-Bellevue along Highway 40.
Internal studies show travel between home and the workplace will probably represent 40 to 50 per cent of all trips on the REM, Emond said. That still leaves significant room for other types of riders: students, tourists and people with “atypical schedules,” he said.
“Many people cannot do teleworking,” he said. “This is a 50-year project, and the fundamentals that justify a project of this nature more than offset the risks linked to teleworking. Even with teleworking, there are still going to be trips that take place.”
Emond spoke after the Caisse reported a 5.6 per cent return for the first half of 2021, paced by double-digit gains in publicly traded stocks and private equity.
Net investment income amounted to $20.3 billion in the first half, according to a press release issued Wednesday morning. Net assets climbed to $389.7 billion as of June 30.
The first-half performance topped that of the Caisse’s own benchmark index, which returned 4.4 per cent. Canada’s benchmark S&P/TSX Composite Index was one of several global indices to move higher in the period, soaring more than 17 per cent thanks to gains in energy, financial and information technology stocks.
“Basically, all of the portfolios did what they had to do and what they should have done,” Emond said.
Over five years, the Caisse’s annualized return comes out to 8.5 per cent, for net investment results of $126 billion. That also beats the 8.3 per cent return of CDPQ’s benchmark index.
Equities returned 12.1 per cent in the first half, powered by gains of 13.5 per cent in private equity and 11.4 per cent in publicly traded stocks. As of mid-year, equities represented almost half of net assets.
So-called “real” assets such as infrastructure added 4.1 per cent, while fixed income posted a negative return of 1.8 per cent as interest rates rose.
Real estate — a major trouble spot over the last two years — returned 4.1 per cent, compared with a loss of 0.9 per cent loss for CDPQ’s benchmark index. The Caisse concluded almost 40 property deals — for a total of $5.1 billion — in the first six months, including $2.4 billion in asset sales.
Key uncertainties for investors such as the Caisse include a possible economic slowdown, inflationary pressures and the strategy of the world’s biggest central banks, Emond said. Caisse executives will also pay close attention to geopolitical tensions and the evolution of the pandemic.
On the deals front, the environment “remains very competitive,” the CEO said. “Valuations are high, there are record amounts of liquidity and (interest) rates are low, which stimulates competition for assets. This implies returns that are harder to find.”
“We can estimate that at the start, the impact (of remote work) could be about 10 per cent” on ridership, Caisse de dépôt et placement du Québec chief executive Charles Emond told reporters Wednesday on a video conference. “We could be in this period for a while, with teleworking.”
Quebec’s public pension manager is building the REM via its CDPQ Infra unit. It also plans to run the system once operations begin late next year.
When completed, the $6.9-billion network — Montreal’s largest transit project since the inauguration of the métro in 1966 — will link the South Shore to Central Station over the Champlain Bridge. Other phases will come online in the ensuing two years, with links to Deux-Montagnes, Trudeau airport and Dorval, Pointe-Claire, Kirkland and Ste-Anne-de-Bellevue along Highway 40.
Internal studies show travel between home and the workplace will probably represent 40 to 50 per cent of all trips on the REM, Emond said. That still leaves significant room for other types of riders: students, tourists and people with “atypical schedules,” he said.
“Many people cannot do teleworking,” he said. “This is a 50-year project, and the fundamentals that justify a project of this nature more than offset the risks linked to teleworking. Even with teleworking, there are still going to be trips that take place.”
Emond spoke after the Caisse reported a 5.6 per cent return for the first half of 2021, paced by double-digit gains in publicly traded stocks and private equity.
Net investment income amounted to $20.3 billion in the first half, according to a press release issued Wednesday morning. Net assets climbed to $389.7 billion as of June 30.
The first-half performance topped that of the Caisse’s own benchmark index, which returned 4.4 per cent. Canada’s benchmark S&P/TSX Composite Index was one of several global indices to move higher in the period, soaring more than 17 per cent thanks to gains in energy, financial and information technology stocks.
“Basically, all of the portfolios did what they had to do and what they should have done,” Emond said.
Over five years, the Caisse’s annualized return comes out to 8.5 per cent, for net investment results of $126 billion. That also beats the 8.3 per cent return of CDPQ’s benchmark index.
Equities returned 12.1 per cent in the first half, powered by gains of 13.5 per cent in private equity and 11.4 per cent in publicly traded stocks. As of mid-year, equities represented almost half of net assets.
So-called “real” assets such as infrastructure added 4.1 per cent, while fixed income posted a negative return of 1.8 per cent as interest rates rose.
Real estate — a major trouble spot over the last two years — returned 4.1 per cent, compared with a loss of 0.9 per cent loss for CDPQ’s benchmark index. The Caisse concluded almost 40 property deals — for a total of $5.1 billion — in the first six months, including $2.4 billion in asset sales.
Key uncertainties for investors such as the Caisse include a possible economic slowdown, inflationary pressures and the strategy of the world’s biggest central banks, Emond said. Caisse executives will also pay close attention to geopolitical tensions and the evolution of the pandemic.
On the deals front, the environment “remains very competitive,” the CEO said. “Valuations are high, there are record amounts of liquidity and (interest) rates are low, which stimulates competition for assets. This implies returns that are harder to find.”
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