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. *

* 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 December 31, 2020 *

$3.3B

in real estate assets *

$3.4B

in total assets *

87

properties

Source of Return

2011201220132014201520162017201820192020
Income 5.8%5.1%4.3%4.3%4%4.5%4.4%4.2%4.2%3.9%
Capital 12.5%14.1%4.3%1.7%0.4%0.8%0.9%2.1%5.5%(1.1)%
Total 18.2%19.2%8.6%6%4.5%5.3%5.3%6.3%9.7%2.7%

Compound rates of return

(gross of investment management fees)
Three Month – Q4 * 0.62%
Year-to-date * 2.74%
One Year 2.74%
Three Year 6.22%
Five Year 5.84%
Ten Year 8.45%

Diversification by property type

By property type (millions)

Retail 12.4% $ 375
Office 39.8% $ 1,202
Industrial 21.9% $ 662
Residential 18.7% $ 563
Other 7.2% $ 217

Diversification by region

By region (millions)

British Columbia 22.6% $ 683
Alberta 10.9% $ 330
Prairies 0.7% $ 20
Ontario 53.6% $ 1,619
Quebec 9.3% $ 280
Atlantic 2.6% $ 80
U.S. 0.2% $ 7

Quarterly Highlights

Q4 2020 London Life Real Estate Fund Bulletin

The London Life Real Estate Fund concluded the year by highlighting the importance of portfolio diversification and a defensively titled investment strategy.  In the midst of a global pandemic, the Fund provided resilient income performance and stable property level capital returns, delivering strong relative performance. The Fund announced the return of valuation confidence early in January 2021 as increased levels of investment and leasing improved visibility of market conditions, providing the data required to inform and support property valuations. This is a critical first step in the Fund’s return to standard operations. As of January 11th, 2021, contributions and transfers into the Fund have resumed.  

360 Torrance, Burlington, ON
2200 Trans Canada Hwy, Pointe-Claire, QC
The Shaughn, Montreal, QC
Performance

The total gross return for the year was 2.74%, inclusive of a 3.85% income return.  A negative capital return was realized, largely attributed to the mark to market of the Fund’s debt.  Asset class returns were mixed.  Strong performance in the industrial (15%) and multi-residential (10%) sectors were offset by a more challenging retail (-9%) and office (-0.5%) landscape.  Income performance faced pressure from COVID-19 related fallout, including government mandated shutdowns and relief measures that provided limited support.  Despite these conditions, the Fund ended the year with portfolio occupancy of 92.6% and was able to collect 97% of rent payable from the period of April through December.  An investment in a core, privately held, diversified real estate portfolio continued to deliver strong performance with minimal correlation to other investments and limited relative volatility.  For context, in 2020 the S&P/TSX REIT index returned -13.1% while the S&P TSX composite delivered 2.2%.  As a measure of direct comparative performance, the MSCI Property Fund Index (PFI) had total gross return of 0.51% for the year. 

Investment Update

With uncertainty a central theme of 2020, new investment activity for the year was supressed from typical levels.  Two non-core suburban office assets in B.C. were sold in the second quarter for net proceeds of approximately $90M.  In September the Fund divested of a multi-residential asset located in Milton, ON generating over $58M.  Mindful of evolving market conditions, the Fund focussed its capital deployment strategy around active development as well as essential life and safety initiatives. 

Looking Ahead

With vaccines rolling out, the end of this challenging period appears to be to the horizon.  Society has adapted admirably in the COVID-19 era, but there remain questions on the longer-term implications for the economy, and real estate.  We continue to believe that the Fund’s focus on building an enduring portfolio, with high quality assets located in transit oriented, amenity rich locations, will continue to resonate with tenants, and ultimately deliver attractive returns to investors.  This operational focus, together with a strong balance sheet and a tactical capital strategy, will allow the Fund to continue to participate in the economic recovery. 2021 will undoubtedly present new challenges and opportunities. The Fund will continue to build upon its long history in creating successful outcomes for its 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 2020 Bulletin PDF (264 KB)
Q3 2020 Bulletin PDF (318 KB)
Q2 2020 Bulletin PDF (193 KB)
Q1 2020 Bulletin PDF (1 MB)

Want to Invest?

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