RBC Global Asset Management Inc. (RBC GAM) today announced that the RBC Canadian Core Real Estate Fund has reached another important milestone on its growth journey. Acquisitions and divestments of this magnitude represent the fifth significant transaction undertaken by the fund since it began in 2019, positioning its gross asset value above $5 billion.
The Fund recently sealed a major transaction of its $860 million portfolio, acquiring partial interest in 40 assets and divesting five other properties valued at $175 million. This moves the Fund’s portfolio to new highs in support of its growth and adaptation as it meets emerging market demands. The Fund has also, as part of its more general expansion strategy, raised over $500 million in subscription proceeds, well exceeding targets and taking its net asset value to over $4 billion. Jennifer Schillaci, Managing Director and Head of Real Estate Equity and Mortgage Investments at RBC GAM Inc, said: “The market conditions in Canada are challenging,” adding that the Canadian real estate sector is “naturally eclectic”. The rise in interest rates and uncertainty of the economy over the past two years present their challenges, but there has also been ample opportunity presented to well-capitalized investors,” said Schillaci. Meanwhile, against this backdrop of heightened challenges, the Fund posted outstanding results, including the successful closing of a green bond offering and one of the largest transactions ever made.
To support such growth and commitment, the Fund released its second green bond worth $250 million and rated A (low) by DBRS. This one belongs to the strategy of sustainable finance for RBC, and that would fund green projects and environmentally conscious acquisitions. These proceeds are assigned to eligible green projects and support the achievement of integrating ESG considerations into the investment strategy of the Fund.
Since its inception, the Fund has been actively considering ESG principles for its core strategy, even though it does not have an explicit focus on ESG outcome. As a result of this, the Fund gained accolades in the industry high ranking it was ranked fifth in the Global Real Estate Sustainability Benchmark (GRESB) report for the fourth successive year and ranked third in Canada in the Non-Listed Core Diversified, adding to its reputation for consistent performance and adherence to responsible investment practices.
On the ‘value’ view that its strategies and alternative options have produced outstanding returns during the past five years, RBC GAM Inc. Managing Director and Head of Private Markets Michael Kitt stressed that it has been strategic growth. “Launched as the foundational building block of our private markets investment capabilities, we have experienced tremendous growth within RBC Canadian Core Real Estate Fund,” said Kitt. “The Fund has truly added rigor and discipline to our expansion strategy, while facing the test of a fluidly evolving market with robust performance.”.
In addition, the partnership with the real estate investment firm, QuadReal, a leading Canadian organization, has played an influential role in the Fund’s success. Speaking about the Fund’s progress, Remco Daal, president of Canadian Real Estate at QuadReal, said confidently: “This is a very complementary venture that continues to deliver value to clients,” underlining strategic alignment and client-focused outcomes.
RBC managed to establish benchmarks in green finance pertaining to real estate across Canada by holding onto a commitment toward sustainable growth. In fact, the success of the last expansions and green bond issuances of recent portfolio expansion by the RBC Canadian Core Real Estate Fund underlines the role it played for negotiating through and with economic uncertainties while creating sustainable investments. Such landmarks for the Fund highlight how strategic an emphasis RBC holds toward ESG integration and sustainable growth-allowing it to be at the leading end of Canada’s real estate investment landscape.
All the while, the Fund reflects RBC’s long-term vision in terms of growth and innovation and value creation, thus enhancing its reputation in the Canadian market and beyond.