London Life Real Estate Fund

The London Life Real Estate Fund was launched in 1998 to create a vehicle for direct real estate investment. The Fund invests in 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  March 31, 2022

$3.8B

in real estate assets

$3.9B

in total assets

88

properties

Source of Return

2013201420152016201720182019202020212022
Income 4.3%4.3%4%4.5%4.4%4.2%4.2%3.9%3.4%0.8%
Capital 4.3%1.7%0.4%0.8%0.9%2.1%5.5%(1.1)%13.1%4.5%
Total 8.6%6%4.5%5.3%5.3%6.3%9.7%2.7%16.5%5.3%

Compound rates of return

(gross of investment management fees)
Three Month – Q1 5.31%
Year-to-date 5.31%
One Year 19.42%
Three Year 10.74%
Five Year 8.90%
Ten Year 8.43%

Diversification by property type

By property type (millions)

Retail 11.1% $ 392
Office 33.1% $ 1,176
Industrial 30.5% $ 1,075
Residential 17.0% $ 599
Other 8.0% $ 280

Diversification by region

By region (millions)

British Columbia 22.2% $ 782
Alberta 9.7% $ 341
Prairies 0.6% $ 23
Ontario 56.9% $ 2,003
Quebec 8.2% $ 289
Atlantic 2.3% $ 81
U.S. 0.2% $ 6

Quarterly Highlights

Q4 2021 London Life Real Estate Fund Bulletin

Despite ongoing challenges related to a lingering pandemic, the London Life Real Estate Fund produced its strongest level of return since 2012.  The 16.5% total gross return was a product of the stability of income (3.4%) and robust capital performance (13.1%) driven largely by the industrial component of the portfolio.  The Q4 gross return was 4.2%.  The Fund’s long established historical track record of better than 90% occupancy was maintained, and the Fund’s gross value grew by 11%.  Rent collection exceeded 98% in each quarter throughout the year, including a Q4 collection level of 99%.  Financing activity over the course of 2021 reduced the overall average financing rate in the portfolio by 13 bps to 3.02%. 

The Chronicle, 1500 Robson, Vancouver, BC
The Chronicle, 1500 Robson, Vancouver, BC
Goreway Business Park, Brampton, ON
Development Update

Late in 2021 the Fund was pleased to officially open the doors at the Chronicle project in downtown Vancouver (https://rentchronicle.com/) and begin to house its first new residents.  The asset was welcomed to the market at a ribbon cutting ceremony attended by leadership from GWLRA and Mayor Kennedy Stewart.   While these types of projects take time, stakeholders are rewarded with significant created value and risk adjusted return premiums. As noted in previous updates, development forms a critical component of forward Fund strategy.  The Fund has a series of active projects as well as a deep pipeline of future opportunity in land that is in various stages of pre-development.  

ESG Commitment

Since 2013, the Fund has realized a 30% reduction to its Global Green House Gas (GHG) emissions across its office and residential portfolios through regular energy audits, setting reduction targets and retrofitting buildings to improve energy efficiency and reduce emissions.  While significant, there is much more ahead and in late 2021, the Fund committed to align with the Federal government target of achieving Net Zero in GHG emissions by 2050.  Management will provide timely updates to stakeholders as the ‘road map’ is developed and interim goals are achieved. 

Forward Outlook

With the exception of the office sector, which has open questions on how space will be utilized as the pandemic fades into the background, fundamentals across the balance of core asset classes are positive.  Canadian housing remains undersupplied and growth targets for new immigration are aggressive. The cost of home ownership continues to rise at a faster pace than rental rates, which should create favorable conditions for the multi-family portfolio.   The retail outlook continues to evolve along with shopping habits, however, the Fund strategy of owning quality, grocery-anchored centres has proved resilient, as highlighted by a 96% occupancy level in that segment of the portfolio.  With limited available inventory and soaring demand, industrial rents have grown at an unprecedented pace.  Canada however has one of the lowest rates of e-commerce sales penetration relative to its peer nations and, with the expectation that the gap closes, demand from warehousing/logistics users should continue to swell.   Portfolio diversification has always been a cornerstone of Fund performance and 2021 certainly served as a validation of Fund 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 bulletin

Past Performance Reports

Quarterly Bulletins

Q4 2021 Bulletin PDF (1 MB)
Q3 2021 Bulletin PDF (352 KB)
Q2 2021 Bulletin PDF (348 KB)
Q1 2021 Bulletin PDF (428 KB)

Want to Invest?

Contact a London Life advisor to invest in the London Life Real Estate Fund.