Real Estate

On a global basis, investment-grade real estate has continued to exhibit relative stability of returns as a result of its income-producing characteristics. Liquidity within the asset class has been increasing, and there continues to be new capital flow from investors that are either seeking diversification within their investment portfolios, or return enhancement through opportunistic investing. There also continues to be a growing trend among institutional investors around the world to be deploying capital outside of their domestic markets.

As planned, this past fiscal year saw ATRF begin its active real estate investment program. While the initial focus has been on real estate fund investments outside of Canada, we expect to begin making direct property investments within Canada in the coming year. Looking ahead, we anticipate building a well-diversified, risk-controlled portfolio of real estate assets, with investments both in Canada and around the world.

As the real estate investment program is still in its early stages, returns came from a very limited asset base in 2010-11. While one small investment was held throughout the year, the vast majority of real estate capital was deployed in the last few months of the fiscal year. For this limited time period, the real estate portfolio generated a return of 7.1%, with the benchmark set to match the portfolio return.