Investments
Real estate
Allocation
9.7%
Annual return
2.33%
Exposure
$0.95 B
Benchmark
1.04%
2025 performance
In 2025, the real estate portfolio generated a return of 2.33% compared to the benchmark return of 1.04%. In 2025, the Bank of Canada continued reducing interest rates, but it was not enough to revive the real estate market. Property values experienced a slight decline in 2025 as investor demand for real estate remains subdued.
Office properties continue to be the weakest performer within real estate, as post-pandemic return-to-office policies are only beginning to take shape.
For the second year in a row, retail properties are the top performer as investors focused on properties anchored by grocery stores.
Investment approach
We work with top real estate managers who oversee our properties around the world. Our focus is on retail, office, industrial, and residential properties.
The goal of our core portfolio of real estate assets is to generate stable and growing income streams through long-term leases.
We try to increase the value of these properties through upgrades and by making them more attractive for sale. We add value by developing market-leading properties for long-term ownership.
Capital allocation
Real estate now makes up 9.7% of total fund assets while our policy benchmark is 11.0%.
We continue to sell Canadian properties and reallocate to global real estate markets in 2025. At the end of 2025, nearly 30% of the real estate portfolio was outside of Canada, up from 25% one year prior. Overall, allocation to real estate decreased by almost $54 million.
The real estate strategy remains the same in 2026, which is to continue investing the portfolio globally to increase portfolio diversification.
Real estate
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Allocation
9.7%
Annual return
2.33%
Exposure
$0.95 B
Benchmark
1.04%
2025 performance
In 2025, the real estate portfolio generated a return of 2.33% compared to the benchmark return of 1.04%. In 2025, the Bank of Canada continued reducing interest rates, but it was not enough to revive the real estate market. Property values experienced a slight decline in 2025 as investor demand for real estate remains subdued.
Office properties continue to be the weakest performer within real estate, as post-pandemic return-to-office policies are only beginning to take shape.
For the second year in a row, retail properties are the top performer as investors focused on properties anchored by grocery stores.
Investment approach
We work with top real estate managers who oversee our properties around the world. Our focus is on retail, office, industrial, and residential properties.
The goal of our core portfolio of real estate assets is to generate stable and growing income streams through long-term leases.
We try to increase the value of these properties through upgrades and by making them more attractive for sale. We add value by developing market-leading properties for long-term ownership.
Capital allocation
Real estate now makes up 9.7% of total fund assets while our policy benchmark is 11.0%.
We continue to sell Canadian properties and reallocate to global real estate markets in 2025. At the end of 2025, nearly 30% of the real estate portfolio was outside of Canada, up from 25% one year prior. Overall, allocation to real estate decreased by almost $54 million.
The real estate strategy remains the same in 2026, which is to continue investing the portfolio globally to increase portfolio diversification.