Real Estate Delivers Strong, Predictable Income

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Real estate fits our plan because it provides strong, predictable income to pay pensions. Today, our real estate assets include a well-balanced mix of retail and office properties designed to provide dependable cash flows.

Our real estate portfolio is managed by our wholly owned subsidiary, The Cadillac Fairview Corporation Limited one of North America's largest investors, owners and managers of commercial property, and an award-winning leader in sustainable business practices within the real estate industry.

Cadillac Fairview

Cadillac Fairview and its affiliates own and manage some of Canada's landmark developments: the Toronto-Dominion Centre, Toronto Eaton Centre, Pacific Centre in Vancouver and Chinook Centre in Calgary. The company has an active development program that includes both new construction and the redevelopment and renovation of existing properties. It also has a significant investment in Brazil and oversees our equity investments in real estate companies.

Performance

For the Period Ended December 31, 2012

 

Overall, real estate markets overall performed strongly in 2012. Investor demand for retail and office properties was robust, aided largely by lower interest rates.

Our real estate portfolio earned operating income of $1.0 billion in 2012, primarily from retail and office properties. At year end, the retail occupancy rate was 94% (94% in 2011), while the office occupancy rate was 95% (92% in 2011).

The net value of the real estate portfolio rose in 2012, reflecting valuation growth in North American properties. There was also a significant increase in the value of our investment in Multiplan, a large publicly traded real estate company in Brazil.

  1-Year Performance 4-Year Performance
Assets
($ Billion)
Actual
%
Benchmark 1
(%)
Actual
(%)
Benchmark 1
(%)
16.9 19.4 15.5 15.3 12.6

1 See Benchmarks for details on benchmarks for all asset classes.