The reorganizations change an approach that had made Canada’s pension funds powerhouses in the property market. Despite managing just six per cent of global pension assets, Canadian funds are responsible for 60 per cent of the total value of private real estate deals that directly involve a pension, according to research from CEM Benchmarking and Sebastien Betermier at Montreal’s McGill University.
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Cadillac Fairview, for instance, played a leading role expanding Toronto’s financial district and came to control many of Canada’s top-performing shopping malls.
The move to more streamlined and centralized structures amounts to a blueprint for how some of the world’s most prolific property buyers think the game has changed. Real estate investing has become tougher as higher interest rates pummeled valuations and lenders pulled back. It’s also a recognition that the asset class has become more global and more niche, with tighter margins, and stiffer competition from other types of investments.
