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. 

 

Fund Performance

as of  June 30, 2022

$6.9B

in real estate assets

$7.1B

in total assets

128

properties

Source of Return

2013201420152016201720182019202020212022
Income 4.7%4.8%4.5%4.5%4.5%4.3%4.2%3.8%3.8%1.6%
Capital 6.1%2.6%0.1%0.9%1.8%2.7%4.9%(1.3)%7.8%5.9%
Total 10.8%7.4%4.7%5.4%6.3%7.1%9.2%2.5%11.6%7.5%

Compound rates of return

(gross of investment management fees)
Three Month - Q2 2.84%
Year-to-date 7.54%
One Year 14.93%
Three Year 8.86%
Five Year 8.26%
Ten Year 8.10%

Diversification by property type

By property type (millions)

Retail 9.4% $ 608
Office 29.0% $ 1,873
Industrial 30.5% $ 1,973
Residential 23.4% $ 1,511
Other 7.7% $ 499

Diversification by region

By region (millions)

British Columbia 11.1% $ 709
Alberta 10.0% $ 647
Prairies 1.3% $ 81
Ontario 66.6% $ 4,309
Quebec 10.0% $ 649
Atlantic 0.9% $ 55
U.S. 0.2% $ 14

Quarterly Highlights

Q1 2022 Great-West Life Real Estate Fund Bulletin

The Canadian Real Estate Fund No.1 kicked off the first quarter of 2022 by posting a total gross return of 4.6%.  As has been the case for the past number of quarters, the primary driver of performance in Q1 was the capital appreciation realized on the Fund’s industrial holdings.  Total income returns remained steady as both rent collection (98%) and occupancy (90%) levels held firm.  Approximately 10% (by square footage) of the commercial leases in the portfolio have maturities in 2022 and of that area, more than 50% is industrial.  Resetting those leases to current market levels will improve income performance and help offset any inflationary pressures.  Highlights from an active quarter follow:

320 McRae, Ottawa, ON (multifamily, construction)
320 McRae, Ottawa, ON (rendering)
Abbotside Way, Brampton, ON (industrial, construction)
Abbotside Way, Brampton, ON (rendering)
Laval Industrial, Laval, QC
Goreway Business Park, Brampton, ON
Investment Transactions

The Fund has a strong multi-family weighting with assets in all key markets across the country; however, one market in particular has been notoriously challenging to scale.  Pricing/yield expectations for multi-family assets in Vancouver have created a void of accretive income producing acquisition opportunities and thus the focus has been on identifying well located sites that provide the prospect of future development.  In the first three months of 2022, two such sites were added to the portfolio.  1055 Harwood is a 17,000 square foot site located in the west end neighborhood of Vancouver’s downtown core that will ultimately allow for the creation of approximately 300 units of new generation high-rise apartment housing.  140 West 19th Street is a 26,000 square foot parcel located in North Vancouver’s Central Lonsdale neighborhood.  It is projected that a mid-rise, approximately 90-unit building can be accommodated upon redevelopment.  Delivery for each of the new projects is anticipated in 2026. 

 

Financing Activity

Government of Canada bond yields (5-10 year) have more than doubled since the end of 2021 in response to the expectation that the Bank of Canada will continue to attempt to move to temper levels of inflation not witnessed in over 30 years.  As a result, interest rates have followed suit and are now well above the historic lows of 2020-2021.  Despite these evolving conditions, the Fund secured a new approximate $45M CMHC insured mortgage of approximately against a multi-family asset in Burlington at a fixed rate of 3.62% over a ten-year term.  

Forward Outlook

It would appear that the COVID-19 pandemic is largely in the rear-view, however, the events of the past two plus years will have consequences that will linger for some time.  While not solely responsible, the inflationary environment we are experiencing today is without question related.  Timely to recall that commercial real estate is inflation resilient due to its inherent hedging characteristics, but there certainly is no hedge that is perfect.   The Fund is well positioned to navigate these uncertain times due to a strong occupancy profile, balanced lease maturity schedule, and a conservative debt strategy.   

The Segregated Funds described in this bulletin are offered through a variable insurance contract issued by The Canada Life Assurance Company.

Please note that unit values and investment returns will fluctuate, and past performance is not necessarily indicative of future performance.

For IVIC investors: A description of the key features of the segregated fund policy is contained in the information folder.

Downloads

Latest annual report

Latest bulletin

Past Performance Reports

Quarterly Bulletins

Q1 2022 Bulletin PDF (1 MB)
Q4 2021 Bulletin PDF (1 MB)
Q3 2021 Bulletin PDF (349 KB)
Q2 2021 Bulletin PDF (348 KB)

Annual Reports

Canadian Real Estate Investment Fund - Annual Report 2020 PDF (3 MB)
Canadian Real Estate Investment Fund - Annual Report 2019 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.