Canadian pension funds increasingly turning to Canadian real estate as source of income and long-term protection against inflation
MONTREAL, July 25, 2012 /CNW Telbec/ - Standard Life Investments, a major global asset manager, today announced that the Standard Life Real Estate Fund ("SLREF" or the "Fund") now has over CDN$1 billion in assets under management. The Fund's latest acquisition is 8 West in Calgary, AB.
Real estate houses the economy
"Our Fund's milestone is symbolic of the growing importance of real estate as a source of income and as a hedge against inflation for Canadian pension fund investors. A strong real estate portfolio can protect value through economic cycles because well-situated, high-quality real estate literally houses the economy," stated Peter Cuthbert, Head of Canadian Real Estate with Standard Life Investments in Canada.
Since inception, the SLREF has earned an annualized return of 9.4%1, and has only ever had one negative annual return in its 29-year history. Due to its limited use of debt and the fact that it seeks investment returns primarily through income, the Fund has experienced very low volatility of returns for its pension clients.
Not just a milestone, growing beyond the $1 billion mark reduces risk and enables Standard Life Investments to seek out a greater spectrum of opportunities for corporate funds looking for exposure to real estate in the Canadian market.
Canada's real estate market perceived as a safe haven
Canada's aging population is increasingly looking for steady sources of income and investment opportunities to plan for their retirements. Real estate can provide just such an opportunity, particularly in Canada, where the market exhibits strong fundamentals, and the economy and outlook are healthier than in other G8 countries.
The Canadian real estate market has low vacancy rates overall and a generally positive supply outlook. Thanks to these strong fundamentals, the market is attracting global-minded investors and also contributing to the shift many major institutional investors are making away from public equity towards private placement.
Amidst global uncertainty, Canada is also faring better than many of its international peers on the economic front with a more stable labour market, a significantly lower debt load and a robust banking system operating within a well-regulated environment.
"With many of our new clients, real estate has become a very important asset class. Investors are attracted by this solution well suited for today's volatile financial markets," said Roger Renaud, President of Standard Life Investments in Canada. "We look forward to steadily growing our real estate assets under management and asserting our competitive position in this attractive market."
For more information on the Canadian real estate market, please consult the latest white paper from Standard Life Investments, "The World Needs Canada: Why Canadian Real Estate is a Compelling Investment Opportunity".
The SLREF has a large number of properties under management across Canada, including a number of high-profile buildings. Backed by significant capital commitments, Standard Life Investments anticipates continuing investment in major Canadian real estate markets over the balance of 2012.
The SLREF is available through Standard Life's Group Savings and Retirement's Quality and Choice Investment Program.
SLIRE is a subsidiary of Standard Life Investments Inc. in Canada and functions as the Canadian arm of the Standard Life Investments global real estate group, one of Europe's largest real estate fund managers with 450 properties under management.
About Standard Life Investments
Standard Life Investments Inc. has been providing investment management services in Canada since 1973 and manages approximately CDN$33 billion1 of assets. Standard Life Investments Inc. is a subsidiary of Edinburgh-based Standard Life Investments Limited, a major asset manager and part of the Standard Life group that manages CDN$245.1 billion1 on behalf of clients worldwide.
1Gross of management fees as at December 31, 2011
SOURCE: STANDARD LIFE INVESTMENTS INC.
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