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 December 31, 2022
$3.7B
in real estate assets
$3.8B
in total assets
86
properties
Source of Return
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |
| Income | 4.3% | 4.3% | 4% | 4.5% | 4.4% | 4.2% | 4.2% | 3.9% | 3.4% | 3.4% |
| Capital | 4.3% | 1.7% | 0.4% | 0.8% | 0.9% | 2.1% | 5.5% | (1.1)% | 13.1% | 3.5% |
| Total | 8.6% | 6% | 4.5% | 5.3% | 5.3% | 6.3% | 9.7% | 2.7% | 16.5% | 6.9% |
Compound rates of return
(gross of investment management fees)
| Three Month – Q4 | -0.58% |
| Year-to-date | 6.94% |
| One Year | 6.94% |
| Three Year | 8.59% |
| Five Year | 8.35% |
| Ten Year | 7.12% |
Diversification by property type
By property type (millions)
| Retail | 10.6% | $ | 369 |
| Office | 30.7% | $ | 1,071 |
| Industrial | 32.6% | $ | 1,139 |
| Residential | 22.8% | $ | 798 |
| Other | 3.4% | $ | 116 |
Diversification by region
By region (millions)
| British Columbia | 22.1% | $ | 773 |
| Alberta | 9.4% | $ | 329 |
| Prairies | 0.6% | $ | 20 |
| Ontario | 57.2% | $ | 1,999 |
| Quebec | 8.3% | $ | 291 |
| Atlantic | 2.2% | $ | 77 |
| U.S. | 0.1% | $ | 5 |
Quarterly Highlights
Q4 2022 London Life Real Estate Fund Bulletin
The London Life Real Estate Fund posted a 6.9% total gross return for the calendar year of 2022. The industrial and residential segments of the portfolio led performance as each benefited from favorable market dynamics leading to significant rental rate growth. The overall result was balanced between income and capital while occupancy once again exceeded 90%, concluding the year at 92.8%. While the office sector continues to face headwinds as tenants consider their post pandemic ‘back to the office’ strategies, all other asset classes (residential (2.57%), industrial (2.08%) and retail (1.73%)) continued to perform admirably with sub 3% vacancy. Key updates from the quarter’s activities follow:
8340 Lawson, Milton. ON
1188 West Georgia, Vancouver, BC
Goreway Business Park, Brampton, ON
8350-8450 Lawson Road in Milton Ontario is a 560,000 square foot industrial portfolio that sits on approximately 30 acres of land and is comprised of three newer generation multi-tenant buildings constructed between 2006 and 2008. The buildings are well located with direct visibility from highway 401. In December, management finalized a five-year, approximately $11M financing on the Fund’s interest in the portfolio.
Over the course of 2022 the Fund’s loan to value (LTV) increased by 140 bps to 20.7% matching a short-term strategic target. All financing in the Fund is executed on a fixed rate basis and scheduled to ensure a balanced maturity profile. The weighted average interest rate on the Fund’s mortgage debt is 3.3%.
GWLRA has a dedicated in-house research team that is instrumental in providing Fund management with data and insight that helps shape portfolio strategy. In Q4 the team published two pieces that cover meaningful issues that influence both the Fund and the broader economy: Inflation and Immigration. Please click on the following link to learn more. https://www.gwlrealtyadvisors.com/research/
The Bank of Canada has begun to signal a conditional pause to the interest rate hike cycle which has seen the policy rate grow from 0.25% to 4.25% across seven consecutive hikes in 2022. Stabilization of the interest rate environment would be a welcome signal and help provide economic and investor confidence. The Fund is well positioned going into 2023 with just 9.8% of the commercial portfolio’s leases expiring. Combined with strong in-place occupancy, the limited rollover exposure in 2023 should continue to ensure steady income performance for all stakeholders.
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 2022 Bulletin |
|
| Q3 2022 Bulletin |
|
| Q2 2022 Bulletin |
|
| Q1 2022 Bulletin |
|
Want to Invest?
Contact a London Life advisor to invest in the London Life Real Estate Fund.