Considering Manulife Financial Corp.owns more than 38 million square feet of real estate worth valued at about $11 billion, it is easy to overlook component parts such as its relatively new Manulife Canadian Property Portfolio.
A broad and balanced investment approach is at the heart of the fund’s offering, explained the executive in charge of the fund, Timothy Blair, Manulife Real Estate’s managing director and senior portfolio manager.
“We are really looking to grow that Canadian fund by investing in Canadian assets, we are looking to be geographically diversified across Canada and we invest in the four major asset classes: office, industrial, retail and multi-family – and we are also looking at some development deals.
“. . . a good and growing portfolio,” he added. “We really focus on what I would call quality assets.”
What it owns
Notable holdings of the Manulife fund include the 22-storey 736 – 6th Avenue SW in Calgary “a great little office building,” Toronto’s 45 St. Clair Avenue West, a 14-storey office property – “a great little boutique building” and a number of industrial properties across the country as well as grocery-anchored food-retail in British Columbia.
(736-6th Avenue SW Calgary is on the left in the image and 45 St. Clair Avenue West is on the right.)
The Manulife fund recently acquired 3383 Gilmore Way in Burnaby, a 146,537 sq. ft., five-storey office complex that houses HSBC Technology and Services. It is one of four LEED Platinum certified office buildings in Metro Vancouver.
Office appears to be the current focus of the Manulife fund.
“This year we have been focused on office assets that have long term stability and tendencies. The HSBC building would be one of those. And industrial, we have been acquiring industrial assets this year as well.”
Blair’s quality-first approach is driven by the requirement’s of the funds small to medium-sized institutional client base. “We focus on delivering a strong, predictable income return and we really feel that is what aligns with our investors’ wants.”
How quick for growth?
Blair expects further acquisitions over the last few months of this year, which will cap a solid year of growth for the fund. “We see our fund as a growing alternative in the Canadian market in the core open-ended fund landscape. We do see fairly good growth in our fund and I think at the end of the year you will be very pleased with the growth that we have had.”
Current governors of growth include attracting more investment from institutional clients (and meeting investor) expectations and finding the right properties to buy.
“At times, there is obviously a shortage of product in the Canadian market to acquire. I think we have done a good job not just acquiring on-market transactions but also sourcing off-market deals.”
Blair views himself as a picky buyer. “We are very selective on the acquisitions that we do make. When we are looking at acquisitions we are looking at (properties) that we are comfortable holding for the long term.”
Having an $11-billion property portfolio and all that goes with it is a major advantage for Blair’s fund.
Fully integrated operating platform
“I think the one great advantage of being at Manulife is we are a fully integrated operating platform. We do everything from asset management to portfolio management, we have a great acquisition team, but we also do property management and we lease our own assets and that gives us tremendous insight into the local markets we operate in.”
That extensive Manulife network also comes in handy when the fund seeks to add assets in “hot” property classes such as multi-res. “In the multi-family space, we are focused on looking at new generation, purpose-built multi-family.”
With respect to multi-res, the Manulife real estate executive does see opportunity. “We are talking to developers, to owners in the multi-family space. It is taking advantage of Manulife real estate’s network and allowing us to source transactions.”
Beyond the fund, Manulife continues to be a big real estate machine. In recent weeks it announced the purchase of the 40-storey office tower 55 West Monroe Street in Chicago for US$244 million and announced a joint venture to develop 900 De Maisonneuve West, a new 27-storey building in Montreal.