Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the funds listed below. They are established as a segregated fund under the Insurance Companies Act (Canada).
In Q1 2023, BentallGreenOak (“BGO”) updated the Statement of Investment Policies and Procedures (SIP&P) for BGO Prime Canadian Property L.P Segregated Fund (“the Fund”) available on our DB investment platform. The Fund is also the real estate component of the BGO Canadian Real Estate Plus Segregated Fund available on our CAP investment platform.
The primary changes include revisions to Property Type diversification ranges, including increasing the policy range for Distribution & Warehouse and Multi-Family property types, and decreasing the policy range to Office. BGO made the following material changes:
- Change in property type from Multi-Family Residential to Multi-Family.
- Change in the following property type diversification range:
Property Type |
Old | New |
|---|---|---|
| Office | 25-45% | 15-35% |
| Distribution and Warehouse | 10-35% |
15-40% |
| Multi-Family | 10-30% |
15-35% |
Rationale:
Office: decreased due continued deterioration in sector fundamentals, marked by higher vacancies, muted to negative rent growth forecasts and limited liquidity.
Distribution & Warehouse: increased given the positive outlook for the sector, underpinned by strong market rent growth and low vacancies across Canada’s major metropolitan areas.
Multi-Family: increased given positive sector fundamentals, including strong forecasted population growth in Canada, inadequate housing supply, home ownership affordability challenges and lengthy entitlement processes.
There were no changes to the ranges for Retail (10-30%), Land (0-5%) and Other (0-10%).
Sun Life GRS Investment Solutions’ view
We have reviewed these changes and don’t have any concerns about them at this time.
How does this influence plan sponsors and plan members?
Plan sponsors or plan members don’t have to take any action as a result of these changes.
Questions?
Please contact your Sun Life Group Retirement Services representative.
A copy of the changed SIP&P is available on Sun Life’s Plan Sponsor Services website at sunlife.ca/sponsor. When logged into the website, under the Administration and reporting tab, choose Group Retirement Services. Then, on the top navigation menu, choose Investments>> Governance reports.
