Vancouver’s Red Hot Real Estate Market Increases Demands for CIBT’s Student Housing Business

In the pre-COVID environment, Vancouver's vacancy rate in 2019 was at 1.3% and had been hovering at this range for nearly a decade, according to CMHC.

During the pandemic period in 2020 to 2021, the vacancy rate in Vancouver was 2.3% due to border closures, unemployed workers moved home, domestic, and international students returned home, creating more supplies to the rental inventory.

All these are changing because businesses are re-opening, workers are returning to work therefore moving back to the city, students are returning to campus, migrants across Canada are coming to Vancouver for job opportunities, and new immigrants are entering the country.

Vancouver's expensive real estate created enormous demands for rental housing, especially for those who cannot afford to buy at this time. To make the matter worse, the lack of new development during the pandemic period significantly reduced the supply of housing inventory (https://biv.com/article/2021/08/forecast-bc-home-prices-soar-supply-falls). The all-time-low interest rate enticed those who can afford Vancouver's hefty real estate prices to buy up the remaining inventory. The low-supply, high-demand factor causes the real estate value to soar, per CityNews 1130 (https://www.citynews1130.com/2021/09/05/vancouver-house-prices-supply/).

On September 15th, 2021, the Canadian Real Estate's Association ("CREA") predicts that home prices will increase 19.9% on an annual basis for 2021 and a 5.6% increase in 2022 due to supply shortage (https://dailyhive.com/vancouver/canadian-home-prices-up-20-percent-2021).

Senior economist of BMO Capital Market,Sal Guatieri,commented in a BNN interview: "I think because home prices have risen so quickly, now pushing more people into the rental market, we will see further upward pressure on rents through this year..."(https://www.bnnbloomberg.ca/peak-of-the-mountain-economists-react-to-canada-s-rising-inflation-rates-1.1652615 )


Tremendous Opportunities for CIBT Education Group (TSX: MBA / OTCQX: MBAIF)

CIBT is well-positioned to seize the opportunities by providing rental supplies to the chronic shortage of rental housing to the Canadian and international students coming to study in Metro Vancouver.

Over the past few months, and a series of articles (1), (2), (3), (4), our Stockhouse audience has come to discover CIBT Education Group Inc. (MBA) (TSX.MBA, OTCQX: MBAIF, Forum) – one of the largest education services and student housing investment companies in Canada.

Fast-forward to today, and CIBT is a mega education service and academic real-estate company but offers much more. Its education subsidiaries – including Sprott Shaw College – service more than 11,000 students annually. Its Global Education City Holdings Inc. subsidiary, or GEC, develops student-centric apartments and education super-centres that optimize space and functionality for its thousands of foreign and domestic students.


The company is also creating the unique, one-of-a-kind Education Mega Center Development in Surrey, BC. On February 10th, CIBT announced that its flagship project – GEC Education Mega Center – had received approval from Surrey City Council at the first and second Public Hearings held on February 8, 2021. On February 23rd, CIBT announced GEC Education Mega Center had received City Council approval at third Public Hearings on February 22, 2021. The Company will start the Development Permit application process after the Enactment of Bylaw, followed by the Building Permit application.


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In the News

On September 10th, CIBT has provided a detailed update on its portfolio of academic assets and its vast real estate investments.

A brief summary of the recent highlights include:

• College enrollments at Sprott Shaw College and Sprott Shaw Language College have steadily increased registrations and enrollments for the fall 2021 and spring 2022 semesters as Canada re-opens its borders for international students. Most domestic students return to campus across the province, contributing to a steady, high volume of rental tenants to GEC rental properties.

• GEC Education Mega Center Update: EMC received rezoning approval on February 21st, 2021 (see above). The Company's subsidiary – Global Education City Holdings Inc. – will be submitting the development and building permit applications in the coming weeks. The design and technical drawings are nearly complete and will be ready for submission shortly. The total construction budget, including land cost, is $300 million.

• GEC King Edward: Construction of GEC King Edward started in January 2021. The Company expects construction to be completed by the summer of 2022, in time for the fall 2022 school semester, adding 180 beds and 46,000 gross buildable square feet to its expanding portfolio. The total construction budget, including land cost, is $44 million.

• Other Operational GEC Properties: Since the gradual re-opening of the economy and Canada's borders, the occupancy rate has reached 90% to 100% at most GEC locations. Additionally, rental rates have returned to their February 2020 pre-COVID levels at most properties.

• CBRE Sales Transaction: Since the marketing launch on May 25th, Global Holdings has processed 31 potential buyers' due diligence requests and has received ten written offers to purchase a portion of the entire portfolio of the GEC branded operational properties offered for sale. These offers range from purchasing one hotel to all GEC branded rental apartments and five parcels of land at the rezoning phase.

• New projects under review: A proposal to purchase a parcel of land on the Cambie Street corridor submitted by Global Holdings is pending the seller's acceptance. In addition, Global Holdings is in discussion with prospective partners to explore the opportunity to acquire ownership in a substantial project in Metro Vancouver. Negotiations on these initiatives are underway and will continue in the coming weeks.

In early September, CIBT proudly reported that the Company had been named one of the "Top 100 Fastest-Growing Companies in British Columbia" in the August 30th, 2021 issue of the Business in Vancouver.

The accolades continued as CIBT was also named one of the "Top 100 Public Companies in British Columbia" in the August 2021 edition of BIV's Book of Lists magazine. Additionally, the Company's acquisition of two residential rental buildings, branded as GEC Marine Gateway (MC") – currently ranked one of the "Biggest Real Estate Deals of 2020" in the August 2021 edition of the Book of Lists magazine.

Gaining public investment and media traction, GEC's Education Mega Center has also been featured in "The Globe and Mail" in an article titled "In Vancouver, 'mega' education centre sets the grade.

In short, this is one dynamic, laser-focused company.

Toby Chu, Chairman, President and CEO of CIBT Education Group Inc., commented:

"We are proud to be recognized and to be ranked in several prominent categories by Business in Vancouver, which highlights the strength of our business model despite the economic challenges caused by the COVID-19 pandemic. As more students return to school and businesses re-open, we will continue to execute on our growth strategy in expanding our real estate portfolio and advancing our education segment."


About CIBT Education Group: Company Snapshot

CIBT is one of Canada's largest education services and academic real estate companies. With a global presence since 1994, CIBT employs nearly 600 staff at 45 business locations and operates a global network of 2,500 recruitment agents. In 2020, the group provided education, student recruitments and accommodation services to over 11,000 students. Its real estate portfolio, including operating assets and development budget, exceeds $1.5 billion.

CIBT's education subsidiaries include Sprott Shaw College (established in 1903), Sprott Shaw Language College, Vancouver International College Career Campus, CIBT School of Business and Global Education Alliance. These subsidiaries offer over 150 accredited educational programs in healthcare, business, e-commerce, cyber-security, hotel management, language training and recruitment services at 29 locations in Canada and abroad.

CIBT's real estate subsidiary, Global Education City Holdings Inc. ("Global Holdings"), develops and manages academic assets such as student-centric rental apartments, corporate housing, hotel, and education super-centres. Since 2015, Global Holdings has provided B2B accommodation service to 90 schools in Metro Vancouver and B2C direct registration of 6,000 students from 71 countries. The GEC® branded portfolio comprises 10 projects, 15 buildings spanning nearly 1.5 million square feet, including operational, under-construction and development properties.

CIBT also owns Irix Design Group Inc. ("Irix Design"). Irix Design is a leading design and advertising company that services over one hundred corporate clients, including CIBT.

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For more information, visit cibt.net.


FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.