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  June 30, 2022

$3.8B

in real estate assets

$3.9B

in total assets

87

properties

Source of Return

2013201420152016201720182019202020212022
Income 4.3%4.3%4%4.5%4.4%4.2%4.2%3.9%3.4%1.6%
Capital 4.3%1.7%0.4%0.8%0.9%2.1%5.5%(1.1)%13.1%7.0%
Total 8.6%6%4.5%5.3%5.3%6.3%9.7%2.7%16.5%8.6%

Compound rates of return

(gross of investment management fees)
Three Month – Q2 5.31%
Year-to-date 8.61%
One Year 18.20%
Three Year 11.08%
Five Year 9.23%
Ten Year 8.17%

Diversification by property type

By property type (millions)

Retail 11.10% $ 394
Office 32.0% $ 1,143
Industrial 32.0% $ 1,144
Residential 16.9% $ 604
Other 8.1% $ 289

Diversification by region

By region (millions)

British Columbia 22.3% $ 796
Alberta 9.5% $ 340
Prairies 0.6% $ 20
Ontario 57.1% $ 2,039
Quebec 8.2% $ 292
Atlantic 2.2% $ 80
U.S. 0.2% $ 6

Quarterly Highlights

Q1 2022 London Life Real Estate Fund Bulletin

The London Life Real Estate Fund kicked off the first quarter of 2022 by posting a total gross return of 5.3%.  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 (92%) levels held firm.  Approximately 8% (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:

The Chronicle, 1500 Robson, Vancouver, BC
The Chronicle, 1500 Robson, Vancouver, BC
Goreway Business Park, Brampton, ON
Investment Transaction

In the first quarter the Fund acquired a 100% freehold interest in ‘Centre 61’, a recently upgraded and fully leased 257,400 square foot mid/large bay multi-tenant industrial building situated on 9.5 acres within an established node in southeast Calgary, benefiting from centrality, complementary surrounding uses, and access to amenities. The Property offers 22-foot clear ceiling heights, ample dock and drive-in doors and a rail-spur on the north side of the building.

The asset is 100% leased to five tenants, ranging in size from 16,641 square feet to 96,097 square feet with a weighted average term remaining of 6.3 years. The building can be further demised or consolidated as may be required to accommodate different tenants.

The addition of Centre 61 provides the Fund an increased exposure to the industrial sector at an attractive and stable yield profile.

Development Update

As noted in the most recent bulletin, the “Chronicle” (https://rentchronicle.com/) project in the vibrant West end of downtown Vancouver officially completed and began leasing.  Management is pleased to report that the initial lease up of the asset is exceeding expectations and is now approximately 45% leased at rental rates ahead of projections.  It is expected that the property will achieve a stabilized state in the fourth quarter of 2022. 

The Chronicle represents the first multi residential asset in Vancouver for the Fund, a notoriously challenging market to scale given pricing expectations.  The building is an exceptionally located, 128-unit luxury rental apartment building offering tenants a full suite of amenities all within walking distance of the downtown core.   

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 bulletin

Past Performance Reports

Quarterly Bulletins

Q1 2022 Bulletin PDF (1 MB)
Q4 2021 Bulletin PDF (1 MB)
Q3 2021 Bulletin PDF (352 KB)
Q2 2021 Bulletin PDF (348 KB)

Want to Invest?

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