Canada Life real estate fund property valuation update

Thank you for your patience during the temporary suspension on the Canada Life real estate fund. Due to continued valuation uncertainty in the real estate investment market and in order to protect investors, the temporary suspension on contributions into, transfers and redemptions from the real estate fund remains in place and transactions aren’t permitted except those that are required by regulation/legislation.

 Funds affected

• London Life Real Estate Fund 2.17G (LLREF) 
• Great-West Life Canadian Real Estate Investment Fund No. 1 (CREIF) 
• Canada Life Real Estate Fund (GWLRA) SF353 

Continued market uncertainty in property valuations

The conditions related to COVID-19 have reduced the number of real estate transactions that have taken place and also our confidence in property valuations. The valuation of real estate, like many private assets, depends on evidence generated from comparable investment transactions because they provide relative information needed to inform property value conclusions. A significant reduction in transaction activity continues to create material valuation uncertainty related to the fund’s real estate properties.

What’s happened

• On March 20, 2020, Canada Life suspended the real estate fund as a result of the market conditions caused by COVID-19. This was done in the best interest of our investors, since there was material uncertainty in the valuation of the properties held by the fund. During the temporary suspension, no transactions have been allowed in or out of the fund.
• In June, we resumed valuation of the properties of the fund because we saw the gradual lifting of emergency orders and an improved understanding of the cashflow implications for real estate, including rent collection levels, and the application of government rent relief programs.
• Over the course of the three-month period ending August 31, each of the fund’s real estate holdings was valued once externally and twice internally.
• While these valuations represented a better estimate of market value as compared to the March 20 property values, the fund manager continues to look for the return of confidence in property valuations before we can lift the suspension.

Join us

To hear an update about the real estate fund, you’re welcome to take part in our next This week with Canada Life call. Registration for the call on Sept. 16 is now live!

For more information  

• To learn more, check out the resources page on the advisor site.
• Updated commentary and information about the fund is always available in the Learn more section at the bottom of the GWL Realty Advisors website.

What’s next 

Before we can lift the suspension, we need more valuation certainty related to the properties held by the fund and more comfort with the liquidity position of the fund and our ability to satisfy redemption requests. The easing of general population restrictions and the re-opening of the economy are expected to restore investment transaction activity and provide the evidence required to increase valuation certainty.

We continue to put customers at the centre of what we do. We’re offering a process to facilitate payments to those investors who have an urgent need and who do not have access to any other source of funds during the suspension. The value of the investor’s account will be reduced by the amount of any payment made. 

Stay tuned for more information

We don’t yet have a timeframe for when the suspension may be lifted. We’ll email you directly with any significant developments towards lifting the suspension. In the meantime, updates will be posted on the websites listed above, so visit the sites regularly for current information about the fund.

The real estate fund remains a sound investment for a diversified investment portfolio over the long term. The fund is backed by the extensive experience and talent within GWL Realty Advisors, which manages its high-quality real estate holdings and tenant base. GWL Realty Advisors and Canada Life remain committed to this fund.