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, 2021

$3.2B

in real estate assets

$3.5B

in total assets

86

properties

Source of Return

2012201320142015201620172018201920202021
Income 5.1%4.3%4.3%4%4.5%4.4%4.2%4.2%3.9%1.8%
Capital 14.1%4.3%1.7%0.4%0.8%0.9%2.1%5.5%(1.1)%5.3%
Total 19.2%8.6%6%4.5%5.3%5.3%6.3%9.7%2.7%7.1%

Compound rates of return

(gross of investment management fees)
Three Month – Q2 4.21%
Year-to-date 7.08%
One Year 10.53%
Three Year 7.35%
Five Year 6.76%
Ten Year 8.08%

Diversification by property type

By property type (millions)

Retail 12.0% $ 375
Office 37.3% $ 1,201
Industrial 25.1% $ 689
Residential 18.0% $ 564
Other 7.7% $ 233

Diversification by region

By region (millions)

British Columbia 23.0% $ 728
Alberta 10.1% $ 319
Prairies 0.6% $ 20
Ontario 55.0% $ 1,739
Quebec 8.7% $ 277
Atlantic 2.5% $ 79
U.S. 0.2% $ 6

Quarterly Highlights

Q2 2021 London Life Real Estate Fund Bulletin

The London Life Real Estate Fund was established in 1998 and has grown into a well diversified $3B+ portfolio comprised of 86 institutional quality assets.  The Fund’s long track record of producing stable income returns has and continues to be its cornerstone.  COVID-19 has created challenges for the commercial real estate sector but also opportunity.  The post pandemic era will come with an evaluation of how real estate is utilized and provides value going forward.  The only thing that will be certain is that there will be change.  The Fund has always prioritized functional real estate that can adapt to the evolving needs of tenants and as such, is well positioned to capture opportunities as they arise.  Portfolio construction has been crucial in navigating the current conditions and has rewarded stakeholders with strong returns.  Highlights from the second quarter follow:

Winston Business Park, Oakville, ON
Superior Business Park, Mississauga, ON
269 Laurier, Ottawa, ON
Performance

The total gross return for the quarter was 4.3% bringing the year-to-date total to 7.1% and the trailing twelve-month figure to 10.5%.  For the first half, performance was distributed between income (1.8%) and capital (5.3%).  Portfolio occupancy (91%) continues to drive the income component of return while substantial valuation gains amongst the Fund’s industrial holdings, which represent 25% of the portfolio, led the capital component. 

Financing

Favorable conditions continue to exist within debt markets and the Fund has been active in securing new financing to improve the overall debt profile and drive performance.  Two transactions were finalized in the second quarter representing $52M in proceeds at an average interest rate of 2.9%.  The Fund loan to value sits at 21% with another approximately $40M in new financing proceeds scheduled to close in the third quarter.  

Forward Outlook

The future of office work is appropriately a topic of much discussion at present with far ranging and often polarizing opinions associated.  Clarity is however beginning to take form as many organizations have started to message plans for the return to the office.  What is known is that there will not be a “one size fits all” solution and the path back will remain fluid based on the trajectory of the pandemic.  Partners in the brokerage community are indicating that sublet space availability is dwindling and tour activity is accelerating across most markets.  These are positive signals for the sector; however, the result will ultimately be told over time rather than conjecture.  The Fund’s core office assets are well located, amenity rich and substantial capital is being re-invested to ensure the highest quality tenant experience upon return.   The internal research team at GWLRA has published a series of notes on the topic and can be found at the following link.  https://www.gwlrealtyadvisors.com/research/

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

Q2 2021 Bulletin PDF (348 KB)
Q1 2021 Bulletin PDF (428 KB)
Q4 2020 Bulletin PDF (264 KB)
Q3 2020 Bulletin PDF (318 KB)

Want to Invest?

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