Colin Lynch

[music] Hello I'm Greg Bonnell and welcome to MoneyTalk Live, brought to you by TD Direct Investing. Every day I'm joined by guests from across TD, many of whom you will only see here. We we'll take you through what is moving the markets and answer questions about investing. Coming up on today show: everyone's favourite topic: we are talking real estate. Canada's housing market continues to feel the pressure of rising rates, Colin Lynch, global head of real estate investment the TD Asset Management is here saying although we may not like it, housing is in need of some bitter medicine. And in today's education segment, WebBroker is just a place to trade, it's the news you can use when doing your research. Senior Client Education Instructor Bryan Rogers tells us how to build your newsfeed to keep you in the know. Here's a reminder of how you can get in touch with us with your questions for this show. Just email moneytalklive@td.com or you can fill out that viewer response box right here on WebBroker. Forget you to all that on today show let's get you an update on the market. We had a pretty bruising selloff yesterday. Sliding on both Bay Street and Wall Street into negative territory at this hour. We are seeing downward pressure on American crude. here at home, Crescent Point Energy at this hour right now down to the tune of about 3%, nine bucks and $0.31 a share. We saw some money moving into some tech names which has been a pretty volatile ride as of late. Shopify let's see if they're still holding on, yes they are but fading a little from their high. South of the border, let's check on the S&P 500, that broader read of the American market, you can see right now losing some early momentum. We had some American economic data today including some retail sales of people tried to sift through. You look at these data points trying to think what the Fed is up to next. They are of course meeting next week and expectations are fairly hefty in their trendsetting rate of trying to combat inflation. The S&P 500 right now working its way a little lower at 3999 down about 36 points. A little shy of a full percent. Let's check on the tech heavy NASDAQ. Fearing a little more to the downside. As we said, energy names, let's check on Chevron. Down 1. 6% $260 and change and that's your market update. Rising interest rates have been the main tool central banks have used to tackle red heart inflation. One of the unintended consequences has been the impact on the housing market and with rate set to rise further, there could be more pain to come. My guess sets for housing markets, like Canada's and in the US, it may be necessary medicine to get markets back to fundamentals. Colin Lynch is Head of Global Real Estate Investments with TD Asset Management. Nice to have you Colin. Walk us through this tough medicine. >> First off thanks for having me. It's great to be here. If you step back and look at the rate hikes and look at the reason why we are having rate hikes, we ultimately have the reason being high inflation and a lot of that inflation has two components to it. One is supplied we have had constraints across a variety of sectors including those that impact real estate whether it's labour or materials. There have been constraints. We have had significant demand. Some of that demand has indeed been brought to you in some respect by low interest rates. And that has spurred greater consumption, greater household expenditures, and that filters through the economy and contributes to some of that high inflation. So that's been the dynamic. And I would say that dynamic, the world of zero or close to 0% interest rate, over the long-term, is not really a healthy dynamic to be in. Hence it is necessary medicine. It's important that we return to a more normalized environment where central banks have tools like interest rates that they can use to respond to inflationary environments. What is this mean? For housing? For participants in the residential sector whether it's apartments or condominium… Over the last few years we've seen a significant appreciation in housing prices. Some of that appreciation has been based on the view that we will be in a very long term 0% interest rate. As interest rates adjust back to normal, some of that pricing has to adjust to reflect whether it's high environment costs or higher construction costs etc. Some of that pricing has to adjust to reflect the more normalized environment. So as a result, we are seeing this across classes whether it's public equities are fixed income. Similarly, and aspects of the real estate world, there has to be a bit of an adjustment to reflect that we are going back to a normalized, more normalized environment of long-term where we see higher interest rates. >> Whether it's TD Securities or TD economics, we've seen the pullback in real estate. We've seen prices come down. If were talking about tight tough medicine to get us back to fundamentals, what is that look like going forward? No longer a reality? I guess there are other driving forces. Talk about some demographics about how that could play out. >> Absolutely. Let's call it two sides of the coin. We have, in Canada, and if you compare Canada to other countries, we have robust immigration. That provides a bulwark for the entire housing market. Ultimately, housing and real estate serves the economy and serves society. Society is growing, it requires housing. That creates a lot of demand. That provides a bit of, call it a floor, to the housing market. If you look at Canada though, as a country, we have a much bigger real estate sector. So proportionate GDP relative to other countries. For example the US. So that would be the other side of the coin. Overall economy perspective, one has to be cognizant of that. So what does that mean? I would say the potential for interest rates in Canada to have a greater impact than the US is there because we have real estate being a broad sector. Construction is a bigger component of our economy here in Canada. The other side says "well, over the very long term, we will continue to see robust growth in our population." Particularly in sectors like Toronto and Vancouver which are magnets for global immigration and if you factor in all the … You see potential for growth in the cities and ultimately that will not get reflected in whether it's apartment condominiums or other housing that serves these new immigrants and populations in these cities. So yes, two sides to the coin. In the short term, some volatility, some adjustment required as necessary because of the adjustment doesn't happen today, it will happen at some point in the future. If at some point in the future, it's more likely that adjustment will be harder than it is today. So better to take the medicine today and have the adjustment, recognizing that we still have very strong long-term fundamentals for this country as it relates to the immigration and the demand for housing. >> What is that due to the real estate investors mindset? You were saying "we can't shake the money train anymore and expected to fall off at a low cost to make our investments." But you would think any serious investor would take that long term focus. The money is not free anymore but I have to look forward five, 10, 20 years." >> Exactly. One can take a short-term perspective for one can take a long-term perspective. We have always chosen to look at the long-term perspective and look at those fundamental drivers. Long-term economic growth, long-term demographic growth. The other thing that is critical in real estate is leverage. Participants in this space use, some of them, some, quite a lot of leverage. And it's important to look at what type of leverage. Is it fixed or variable? For what term? All of those decisions become incredibly important in an environment like today. And so those questions are really critical to look at. If you had fixed leverage at a conservative LTV, and you got that leverage two years ago, that's really quite a creative relative to going out today. Trying to get very high low to value and perhaps trying to do a fixed rate today, that will be an incredibly different picture. So that leverage question is very, very important. And so when one is looking at participants in this space, and their opportunity to create value, that leverage question "what is the philosophy leverage?… What type of leverage? What type of lenders? What is the quality developed whether the owner, the participant or the apartment space, what is the quality for that participation in terms of credit?" Becomes an incredibly important driver today. >> For the people who perhaps didn't decide to lock into a certain cost over a fixed amount of time, do they just let it flow? Only six or seven months ago that was pretty seductive. > That's where the math becomes very important right? When one invests long-term, it's really critical to do that math and build the Mathematic quantitative analysis. … Yes, if you have not done that, or if you have made an assumption that rates were going to look like they were seven months ago in perpetuity, you might have some troubles. For other participants in the industry who have done the work and have done this scenario analysis and have looked at their leverage and have been a bit more conservative, that might present an opportunity. There might be an opportunity to acquire incredibly well located, fantastic assets that otherwise wouldn't be available-for-sale. That one knows will make sense in the very long term. There might be an incredible opportunity to acquire these assets today because you might have some participants that, you know, are called out, for lack of a better term as we slowly change the interest rate environment. > Fascinating stuff. Great stuff. Colum Lynch is here to take your questions related to global real estate. We'll get to those questions in just a moment's time. Let's get you updated in some of the top stories in the world of business and take a look at how the markets are trading. Canadian home prices in sales activity continued to slide in August as potential buyers face higher borrowing costs. The latest numbers from the Canadian Real Estate Association show the number of homes changing hands was all him was down almost 25% compared to the same period last year and the average national selling price slipped 3. 9% year-over-year. The Bank of Canada has been delivering some supersized rate hikes and the hopes of tamping down inflation and the and TD economics expects more downside for the housing market on the back of further rate hikes. Shares of Sobey's parent company "Empire CO." Are in the spotlight today. That after a quarterly earnings reports show weakness in some key areas of the business. While sales grew year-over-year, Empire reported a 21% drop in e-commerce activity and earnings-per-share. Came in below expectations. That is operating expenses came in higher than expected. it's a $20 billion takeover deal aimed at the hybrid work trend. Adobe says it has a cash to stock agreement to buy online design company Figma. Which provides design tools for platforms that allow workers to collaborate online. Apart from the figment deal, Adobe also provided an outlook for the fourth quarter that fell below analyst expectations. We did get some more economic data from the states including retail sales. Investors trying to make sense of it ahead of next week's big Federal Reserve meeting. Another expectation of a jumbo sized rate hike from the Fed. We are back now with Colin Lynch, Head of Global Real Estate Investments with TD Asset Management taking your questions on real estate so let's get to them. Here's the first one: we have past Labor Day and it's supposed to be the great returned to the office. Is this actually happening? >> Well it is happening at least in part. I will caveat that we don't have the exact numbers but certainly when you look at a lot of anecdotal evidence, the operator of subways in New York City released last Thursday that they have the highest level of transit usage in New York City since the start of the pandemic. When you look at the trauma transit commission which anticipated a 10 to 15% bump in ridership as a result of both schools, postsecondary and elementary returning, and then that enabling individuals to return in a more wholesome way to the workplace, we are seeing that. We don't have exact numbers. Now, does that mean that we are seeing 100% usage of the office Monday through Friday? No. Especially on Friday. Whether it's. >> Are some funny reason it's that day of the week… Ha ha. >> It's interesting. One might say there might be other reasons ha ha. Certainly Tuesday, Wednesday, Thursday, right now seem to be the highest days in the office. Monday is catching up to Tuesday and Wednesday and Thursday. It's interesting because when you look at transit usage on that Saturday and Sunday, we are in excess of pre-pandemic… That tells you folks are getting ahead, back to the concerns about safety. Increasingly so on a Tuesday, Wednesday, Thursday. Lots of companies have made announcements on a more fulsome return to the office both here in Canada, in the US and across multiple different industries. So I think we will continue to see that announcement ahead of the WHO around the end of the pandemic being in sight. This is clearly welcome news but I think it's important to reflect that we won't, I don't think we'll get to 100%. We'll get to a more fulsome level. Maybe 80% but we won't get to 100%. I think there will be something that will persist. >> Let's get to another question off the platform with the worst of the pandemic behind us. What's the outlook for retail shopping malls? >> Yes. We are still in that revenge spending world. In many parts of the world particularly Canada, the US, Europe. Folks have money that they have received whether it was different checks in the USA, the stimulus checks are here in Canada, we see that and bank balances. We see that in foot traffic in malls which are now nearly at 2019 levels. We see that in spending patterns which are now well in excess of 2019 levels. What is that say? That says individuals are going to the malls in similar ways to what they were doing and 2019. But they're spending more per trip. That says revenge spending. Even revenge travel if you look at prices for air fares. What is that suggest for retail in the future? Certainly positive today. Long-term we think e-commerce will continue to grow. For a shopping mall, we think effectively there are the haves and have-nots in retail. >> That's interesting. What about the mall that you want to be in versus the mall that you kind of have to go to? >> Yes. There are some destination malls. On transit. A lot of different featured stores that their readers are attracted to. They have other space as well. You could almost think of it from a sense of if you are a tourist visiting a city, are there malls that would hit the list of "oh yeah, we really should go there." On the Have-Nots side are malls that if you did the reverse, malls that are not well located, not a lot of amneties, require freshening up, retailers that might not be the first to think of for a particular item, that will be challenging and more so going forward. So it's really important, in my opinion, to have exposure to the "haves " as opposed to the "have-nots." How do you make this more relevant and how do you position is beyond just retail? Is there an element of residential that you can, you know, add to the equation and even some of the have malls or doing that as well. Then there's a whole area of necessity retail. The grocers, pharmacy, those are sort of "always on" and we've seen this through the pandemic. I would put that in the "have" bucket. >> When you talk about real estate, is there that anchor. Saying you have to go to that mall because you have to go to that mall. >> Exactly. Whether it's a grocery store, they are in malls but they are also in other formats right? You grease the economy you are building. Or even high street retail. It's a question of what is your exposure to that space and, we realize pre-pandemic that those are very important retailers. Host pandemic, host the worst of the pandemic, we realized even more of those incredibly important retailers to have exposure to. Those are in the "haves". >> A reminder to do your own research before making any decisions. We'll get back to your questions with Colin Linton just a moment. And now our education segment. When you're on the WebBroker platform you can find a wealth of news content for money talk but that's not the only source of news you'll find. Senior Client Education Instructor Bryan Rogers is here with a look at some of the other news sources that are available. >> Thanks Greg. We have the money talk videos their audiences are discovered. We do have a ton of resources on WebBroker in terms of market news and commentary as well. I'm then a jump there to WebBroker right now. If we go in to research, under "news and commentary", once I open this up, you'll notice you have the ability to search for a keyword right away. But a lot of the things that people may not have noticed before as you can actually filter this by the region you want to look at. The most popular regions is the Canadian market, the US market. You can actually filter the news if you click on the flag. From a US slant, here that will be all the information coming through here on the global news and commentary. More US market related. As you scroll down you'll see business news as well. More of a US labour if you have this flag down here. Checked off. So that's one of the things that you want to look at. Looking through this page. Then you can switch, obviously switch to Canada and you'll notice more headlines related to Canada. So depending on what type of portfolio you have, maybe you want to look at both sides of the equation. You can do that. You can also look on the top right hand side and select either of these at the top. That'll switch it over to the entire page. The other thing you'll notice to his we've got this keyword which I'm gonna look at the second. I'll show you an example. When we go down to the business news… You do also have "money talk videos " some of the more recently. You can look at the archive ones as well. Videos for MorningStar, if you're looking for things related to specific stocks, you can see "why is GM stock so cheap " and further down you can look at articles from the Globe and Mail and other contributors there as well. So in essence of what you're talking about today, Greg, if you go into business news and you want to look at real estate in the US, I can type that in, select the US flag. There's a number of headlines they're related. It will give you the number actually, you can sift through the mall. There are over 2000 here. It'll give you the most recent ones on top. Then you can search through what's going on with real estate. >>'s O'Brien, my entire career is based on using my brain as a sifter to figure out what's going on in the world. To sound somewhat intelligent in front of the camera. Is there a way to filter some of this content so not too much is coming through? >> Yeah. You don't want to get overloaded. That's a great question Greg. You can filter pretty extensively within this page. That's one thing a lot of people don't notice. If we jump back to the categories section on the right, you can now, not only still do that, the Canadian or US flag, on the top right but you can also click on any of these categories right here. If you check off whatever you're looking for, you can keep them all checked if you're looking for everything at first but if you're looking for something specific to the commodities, it'll usually do this subsector here as well or subcategory and then you can view the news from either the past week or today of the past 30 days. Such as click right here. And that's can give you all the news stories related to whatever I'm looking for. So it could be commodities sectors, if I want to look for the equity markets, or a specific company news as an example, you can highlight multiple as well. Then you can also customize a little bit. In terms of the timeframe as well. So if you want to look a little further back, or make it really recent like today. For sure, there is really, you know that term Greg, "no news is good news?" That doesn't apply here on WebBroker. >> Well there would be no career for me. Thanks a lot Bryan. >> Thanks Greg. >> Bryan Rogers, Senior Client Education Instructor at TD Direct Investing. Here are some upcoming master classes. Now before we get back to your questions with Colin Lynch, Global Head of Real Estate Investments at TD Asset Management, a reminder of how you can get in touch with us. Send us your questions. There are two ways you can get in touch with us: you can send us an email anytime at moneytalklive@td.com or use the question box right below the screen here on WebBroker. Just writing your question and hit send. Let's get back to your questions for Colin Lynch on real estate. All right. Somebody wants the crystal ball here how far from the bottom in the Canadian housing market are we? > Certainly from the perspective of the apartment and condominium space, I'd say we've seen some adjustments and pricing in certain areas. You can look at the launches and condominium launches in terms of new projects. We have seen that trail off which would be an indication of a market that is in the middle of an adjustment. I would say were not there yet. Certainly, we are in the middle of the hiking cycle. January really put the full impact the impacts of interest rates don't get felled overnight. It's over time. So I would anticipate that we will continue to see some adjustments and pricing. The flipside, however, is we, as people have moved back into courses and CPD's in cities, as we continue to grow through immigration, particularly in Canada, we are seeing robust rental growth. So that is the others that in the equation. In the real estate world we look at that Rate which was really low a couple of years ago. As rent increases, that increases a certain operating income. And in certain places, we are seeing value adjustments as well. Such a sum that all up, you can look at your Rate and compare that to whether it's a dividend yield on a stock or a yield on a bond and that Rate is looking more attractive. That being said, we continue to anticipate that we will have to see some adjustments given we are not through the hiking cycle. >> All right. Here's an interesting one as well. It sort of feeds into where we are right now in this cycle: where there is so few new apartment buildings been built in Canada right now? It's like they're all condos. It is different. >> That's right. There is a difference to that. There is a very long story but I would sum it up by a couple of things: first of all, one of the biggest reasons for the dynamic that we have seen is rent control. And so, if you take Ontario as an example, Ontario brought in rent control in the late 80s and we saw from that point onward, a shift in the market in terms of what was constructed. Now, does that mean we have had no new apartments in terms of apartment inventory? No. But what the majority of the apartment inventory from the early 90s on word has come from condominium buildings where each of the units were purchased, largely by individuals, have very substantial portion have been rented out by individual landlords. And so, as a result, when you look at a market like Toronto in totality, and you say "let's look at all of the apartment inventory, i.e. apartment buildings plus condominiums," roughly half of that inventory is coming from condominiums. That began to change just around the 2015, 2016 Mark with the view that post-2018, there would be no rent control applied to newer constructed units after 2018. As a result, we've now began to see quite an increase in the building of purpose built rental, in other words apartment buildings. So that's the reason. How does this impact the market? And the decision to build a condo or apartment building? Effectively, if you're buying a condo, you could be an owner or you could be somebody that's looking to rent out. We have largely seen those individuals have less focus on income and take a view that we will see appreciation. So we will get our return based on appreciation. So that means those individuals will pay more for condominiums relative to an institution that might be building an apartment that is much more focused on the income. Because ultimately, institutional investors, institutional owners of apartments pay a distribution. And so that income is really important. And so they are not going to pay as much for that particular unit if the income yield is going to be very low. And so you have to choose. Are you going to build an apartment? Or build a condo? If you can get more value from building the condo, you will build condo. And so over the 90s to 2000 and into the 2010s, that's why you see so much condo and so little new apartment buildings. And that is particular to our country. It if you go to the US, you see a lot more apartments. And a lot fewer new condos. That has to do with the regulatory framework, that is to say rent control, that is different and many US markets relative to Canada. >> Fascinating stuff. Alright let's get back to the platform now. Let's take another question: where the best values in global real estate, short and long term? > So we really like the Asia-Pacific. Let me define Asia-Pacific. That means developed Asia-Pacific countries, Australia, New Zealand, Singapore, South Korea. Why? Also Japan. Why? Because you can access the big emerging drivers of growth in the world without having some of that emerging markets exposure. Like China. That emerging markets exposure creates things like volatility and exchange rates as it pertains to India with a less clear regime around international ownership of property in certain markets i.e., mainland China. If you look at where is a great place to tap into growth, but to do it from the market that has a similar construct of property ownership to what we've experienced here in Canada, we like a lot of those markets. Australia in particular, strong immigration. Very similar to Canada. Destination for growth as a result. We view, whether it's the residential space that has the potential to develop, even offices, in a different framework because we see a significant amount of demographic growth and economic growth in that market. So we do like markets like Sydney, Melbourne in particular, which in the next 10 years will be, will become the largest city in Australia. Tremendous growth. So we like the exposure there. We also like the US Sun Belt. Yesterday I was just in Nashville. Tremendous growth in Nashville. Powering that is folks moving out of higher cost cities like New York, San Francisco. This is been happening for 20 years. It accelerated during the pandemic. So Nashville, Atlanta, Austin, Dallas. Those markets are experiencing tremendous growth and the pricing is quite different than it is in a Boston or a San Francisco Los Angeles. So you get value and you have significant growth potential. And so that is a tremendous positive right across the real estate spectrum and even more when you look at multi family. Because that's the sector very connected to this demographic growth. Plus you have less of a regulatory dynamic around rent control in those markets than in the US. > I had a feeling, not only is calm and full of great insight, he is a pretty cool job too. You just got back from Nashville. We'll get back to your questions for Colin Lynch in just a moment's time. Always do your own research before making your own investment decisions. Don't forget you can email us. Send us an email anytime at moneytalklive@td.com or you can use the question box right here on WebBroker below your screen. Canada's housing market is feeling the strain of rising interest rates and higher shelter costs with most provinces seeing a decline in sales since the spring. Anthony Okolie joins us now digging into the recent numbers. Anthony. >> Thank you Greg. That put sales below pre-pandemic levels. Higher costs are taking a toll on the residential housing market. I brought a chart here to highlight some of the key points from the housing report. We look at home sales across Canada, all provinces reported the kind of sales that Ontario, bucking the trend. The steepest drops were in provinces like Manitoba, Québec and BC. Sales in Ontario however, rose nearly 8% month over month. From the GTA. New listings did fall by 5.4% month over month in August. That marked the second straight monthly drop. Meanwhile, Canadian average home prices were nearly 2% which was somewhat encouraging according to TD economics. There has been a turning point and they say it's before several examples which they cite. One is that sales are still 30% below pre-pandemic levels in Toronto. In addition to that, supply and demand continues to favour buyers in the city of Toronto. Looking ahead, TD economics expects a significant slowdown in economic growth on the back of the Bank of Canada rate hikes. They also expect the Canadian average home prices will drop about 20% on quarterly peak at the bottom of the basis from the first 1:45 thousand 22 to the first 1:45 thousand 23. Greg. >> That carries us through the year that were living in right now into early next year. Longer-term, how does TD economics play up the housing market? >> It's very positive and optimistic about the housing market. This is based on the view of population growth which remains healthy. That should underpin strong housing demand. However, they do say that with rising interest rates and higher home prices, affordability is going to remain strained over the next couple of years. They also point out that the recovery stage of the cycle is likely to reflect a slower price growth trend than the past decade when average home prices rose at an annual average base of about 7%. >> Great stuff as always. Thanks Anthony. >> My pleasure. >> MoneyTalk's Anthony Okolie. And now let's check in with the TSX. Now let's check in on shares of Empire from the top of the show. They are of course the parent company of Sobey's. The stocks down about 5% right now. Air Canada, getting a bit in early at this session, if we can show Air Canada, let's see if they are holding onto their gains. It's been a pretty bumpy ride for the airline industry. But, in the pre-pandemic times, when crude prices were lower, I would check on the airlines to see if they are getting a boost because at the huge cost. Getting back to some fundamental dynamics in the market. South of the border, the S&P 500, we want to see what's happening on Wall Street. It's pretty much holding session lows. We are down almost a full percent. The tech heavy NASDAQ right now, want to see how it's faring. Sliding as we sort of grind through the trading day here right now down 1.3%. Some of the mega tech names out there right now, Microsoft with $245 down to .7%. We are now back with Colin Lynch taking your questions on real estate. Let's get to this one. Coming in off the platform. Where would you put your money if you were to invest now? >> That's a good question. Certainly you mention the apartment space, multi-residential space. Very interesting area. I still think that there is an interesting investment opportunity in aspects of the life sciences space. That is been a strong space over the last year or so. What is the life sciences space mean? That means largely purpose built but some conversions. Purposeful facilities for the board Tories that are doing research into new medical treatments for various conditions, ailments, diseases etc. We've clearly seen very important in terms of vaccine development and there's been a significant amount of money whether from the government, bench capital, pharmaceutical companies that have come into this space. There is been however some speculation. There's been a specific ramp up and ramp down in certain values but how is it evolving in the spaces where you have to look at. As you look at income, there is significant potential to grow in, as investors in life-sciences space. Certainly, the logistics base has been a positive area. There have been questions on key users in the logistics base as to whether they manage or not. Very interesting questions. I go back to the long-term fundamentals which is e-commerce. We will continue to see e-commerce grow in the market in Toronto where the vacancy is less than 1%. We are seeing significant double-digit growth in rents, year-over-year. Still an interesting space. Some cautions, I would say, in different parts of the world you have to look at supply and demand and how much supplies being created relative to demand. If you come back to Canada and look at Vancouver and Toronto, the answer is not enough. So demand is well in excess of supply still. So that goes well for the growth of rents. You also have to look at participants. Back to the question of leverage. There are certain participants out there that have levered out. They are using variable-rate debt building their models based off of the percentage of interest rates. So one has to do once diligence and understand how are these investments in these spaces, whether industrial, multifamily, life-sciences… How are they being done? What leverage is being used? >> Alright. Here's another question off the platform. This was pretty interesting. You talk about China's real estate market… What's happening there? >> China is an interesting place as we all know. Second largest economy in the world. That economic growth driver has been a driver of the real estate market for quite some time. We are still in the collet, COVID zero philosophy, that certainly has impact as it relates to the ability for the market. As an international investor, you have to navigate per capital controls. You have to get money in and get money out and that's not necessarily always straightforward. There is also tax regulations. You have to do is posit a certain amount of money on shore for tax reasons. Which is unique to China. China is also with a significant amount of what's called land uses. So in a freehold market like Canada, you buy the real estate… Those are differences and nuances and then you have some markets like the residential market, where there have been a significant number of developers who have unfortunately experienced some financial distress because, if you go back to supply and demand, there has been a material growth and in supply where the demand necessarily has not been there. Ultimately, that's not a good place for developers to be. So, we've seen a lot of that filter through the market and that's an important consideration in terms of what is the supply and demand demand dynamic as it relates to residential. There are other areas like logistics and industrial that have done relatively well. Because unfortunately, as different cities experience lockdowns and different restrictions, the flow has to continue and in the context of consumption, that is continuing in the context of e-commerce and electronic etc. rather than an in person retail experiences so the industrial space has performed a bit better. I'd say for the others, office and retail, the question is "what is the long-term growth potential of China?" And it's really hard to see through that right now because were still going through this "COVID zero" philosophy. Which is really hampering economic growth. >> Colin Lynch, always great to have you in talk with you with your insights. Our thanks to Colin Lynch, Head of Global Real Estate Investments with TD Asset Management. And here's what's coming up this week. If you want to get a head start just email moneytalklive@td.com. That's all the time we have for the show today. We can talk more about interest rates. The Fed is on deck for next Wednesday. We will have full coverage for you on MoneyTalk Live unfed decision day which is next Wednesday. Thanks for watching. We will see you tomorrow. [music]