RBC Global Asset Management Inc. (RBC GAM Inc.) Wednesday said that RBC Canadian Core Real Estate Fund has entered into an agreement to acquire a 50% interest in a portfolio of real estate assets valued in excess of $1 billion from its partner, British Columbia Investment Management Corporation (BCI) and BCI’s real estate arm, QuadReal Property Group.
The fund’s acquisition represents one of the largest Canadian real estate transactions this year, and increases the size of RBC GAM Inc. and BCI’s partnership to more than $9 billion.
The new assets comprise a portfolio of 12 core properties located in Toronto, Vancouver and Edmonton; 70% are industrial and 25% are multi-family residential by market value, adding approximately 5.5 million square feet of industrial space and 843 residential rental units to the portfolio.
”Leveraging the strength of RBC GAM Inc.’s relationship with BCI and QuadReal, the transaction was completed off-market. Consistent with the terms of the partnership, BCI will own the remaining interest in each individual asset and QuadReal will continue to operate and manage the properties providing important long-term performance alignment,” said RBC GAM Inc. in a statement.
The transaction is expected to close on October 29, 2021, coinciding with the completion of the third tranche of the fund’s multi-year acquisition program with BCI.
“The acquisition of these new assets is another significant milestone for the RBC Canadian Core Real Estate Fund, and demonstrates the value and alignment of our partnership with BCI and QuadReal,” said Michael Kitt, Head, Private Markets and Real Estate Equity Investments, RBC Global Asset Management Inc.
“We believe that an allocation to real assets remains a fundamental component of a well-diversified investment portfolio, and our Fund was created to meet this need by providing Canadian investors and advisors with access to an exceptional portfolio of commercial real estate assets, backed by three industry leaders,” he added.
”The fund is designed to provide investors with an attractive income stream and total returns with limited volatility by investing in a well-diversified portfolio of premium core, income-producing Canadian real estate assets. The addition of the new assets announced today is consistent with the Fund’s target asset allocation, which is designed to provide balanced exposure to the four major sectors of the Canadian commercial real estate market, offering access to an important asset class that historically has been difficult to access for all but the largest institutional investors,” said the company in the statement.