Great-West Life Real Estate Fund

Established in 1981, the Great-West Life Real Estate Fund is one of Canada’s largest real estate segregated funds. The Great-West Life Real Estate Fund (also known as the Canadian Real Estate Investment Fund No. 1 (or CREIF)) invests in a portfolio of high-quality, income-producing properties diversified by type and location. The objective is to provide investors with strong income returns and the opportunity for long-term capital appreciation. *

Effective June 26, 2020, the valuation of the properties in the Fund resumed. The current conditions continue to give rise to significant valuation uncertainty. In the interests of protecting the Fund and its investors, the suspension of any contributions, redemptions or transfers from the Fund remains in place.

Fund Performance

as of September 30, 2020 *

$6.2B

in real estate assets *

$6.4B

in total assets *

122

properties

Source of Return

2011201220132014201520162017201820192020
Income 5.7%5.2%4.7%4.8%4.5%4.5%4.5%4.3%4.2%3.0%
Capital 10.9%14.5%6.1%2.6%0.1%0.9%1.8%2.7%4.9%(1.8)%
Total 16.6%19.7%10.8%7.4%4.7%5.4%6.3%7.1%9.2%1.1%

Compound rates of return

(gross of investment management fees)
Three Month - Q3 * 1.43%
Year-to-date * 1.12%
One Year 3.68%
Three Year 6.49%
Five Year 5.88%
Ten Year 8.94%

Diversification by property type

By property type (millions)

Retail 10.2% $ 578
Office 37.3% $ 2,111
Industrial 18.9% $ 1,071
Residential 28.4% $ 1,604
Other 5.2% $ 292

Diversification by region

By region (millions)

British Columbia 10.3% $ 584
Alberta 12.8% $ 726
Prairies 1.5% $ 85
Ontario 66.2% $ 3,740
Quebec 7.9% $ 449
Atlantic 1.0% $ 57
U.S. 0.3% $ 16

Quarterly Highlights

Q3 2020 Great-West Life Real Estate Fund Bulletin

The Great West Life Real Estate Fund posted a 1.4% total gross return for the third quarter, driven largely by the stability of the Fund’s income return at 0.9%.  Despite ongoing challenges related to the global pandemic, income returns have been buoyed by strong occupancy and collection levels.  Increasing levels of investment and leasing activity helped to improve in-quarter visibility on valuation parameters, allowing appraisers to lift valuation uncertainty qualifications in the multi-family and selectively in the industrial asset class. At quarter end, most the Fund’s property valuations remain qualified and, as a result, the Fund’s temporary suspension remains in place. 

Livmore High Park, Toronto, ON
Livmore High Park, Toronto, ON
Livmore High Park, Toronto, ON
Livmore High Park, Toronto, ON
Occupancy and Rent Collection

Occupancy for the portfolio ended the quarter at 93.2%, unchanged from the previous period.  The Fund is well positioned from a lease expiry profile standpoint with over 66% of its commercial leases secured beyond 2023.  Notably, of the rollover exposure in 2021, 70% of it is within the Fund’s industrial portfolio where market fundamentals remain favorable. 

Collection levels improved in the quarter, averaging better than 93% and totaling 97% when adjusted for the inclusion of payments from the government sponsored Canadian Emergency Commercial Rent Assistance program (CECRA).  CECRA concluded in September and is intended to be replaced by the recently announced Canada Emergency Rent Subsidy (CERS).  This program directly contracts the tenant with the government, removing the landlord as a participant.  

Asset Valuation

In June, the Fund adopted an accelerated valuation process which increased the frequency of external  valuations to a quarterly cadence and at the end of August, the first full cycle of valuations was completed.  Industrial and multi-family values rose as the accelerated adoption of e-commerce created favourable for the asset class, while the multi-family sector continues to benefit from strong investor appetite related in part to the availability of attractive CMHC insured financing and positive supply and demand dynamics.   Office and retail values were negatively impacted, as uncertainly around the timing and potential structural impacts of office use as well as evolving consumer shopping preferences take shape. 

Development Update

The first phase of the Livmore High Park development was completed and granted an occupancy permit in August, with the second phase to follow in Q4.  Leasing activity within the first tower has been robust to date, now at 54%, with rental rates in line with proforma expectations.  The project represents a $160 million investment into 530 units of new generation, amenity rich, transit-oriented multi-family product adjacent to High Park in Toronto. 

Construction progress continues at Vancouver Centre II, which is now 52% preleased and scheduled to be complete in late 2021/early 2022.  More information about the exciting new project is available by following this link:  https://www.vancouvercentre.com/

Benchmarking

The Fund benchmarks performance against various peer groups to provide a relative measure.   The Fund posted very strong returns as compared to the MSCI’s Property Fund Index (PFI), which consists of 9 open-end Canadian core real estate funds.  For the third quarter, the Fund’s 1.4% return bested the PFI’s performance of .7% by an impressive 70 bps.   Over the rolling 12-month and three-year periods, the Fund has outperformed the PFI by 153 bps and 20 bps respectively. Portfolio construction, which is highlighted by its geographic diversification, income-oriented characteristics, a defensive retail strategy and a strong multi-family allocation, continues to drive performance for stakeholders.  

Downloads

Latest annual report

Latest bulletin

Past Performance Reports

Quarterly Bulletins

Q3 2020 Bulletin PDF (317 KB)
Q2 2020 Bulletin PDF (215 KB)
Q1 2020 Bulletin PDF (816 KB)
Q4 2019 Bulletin PDF (1 MB)

Annual Reports

Canadian Real Estate Investment Fund - Annual Report PDF (5 MB)
Canadian Real Estate Investment Fund - Annual Report 2018 PDF (4 MB)
Canadian Real Estate Investment Fund – Annual Report 2017 PDF (4 MB)

Want to Invest?

Contact a Great-West Life advisor to invest in the Great-West Life Real Estate Fund.