The Canada Pension Plan Investment Board’s real estate portfolio rose to 6.2 percent at the end of September – up from 5.6 percent just three months previously.
It comes as the pension revealed it had suffered a $5.3 billion drop in its asset values and recorded an overall negative return of 8.5 percent in the second quarter. CPPIB reported a negative 7.5 percent return in the previous quarter.
Although the Canadian pension didn't release return information for individual asset classes, it said its real estate portfolio had increased from 5.6 percent to 6.2 percent in the three months to 30 September, equivalent to $7.3 billion of the fund's total portfolio.
CPPIB invests primarily in office and retail commercial properties in major cities across Canada as well as the UK, US, some parts of Europe and in the Asia Pacific region.
The increase is in part due to a decline in the pension's equities portfolio, which accounted for 59.9 percent, or $70.4 billion, of total assets, at the end of September – down from 62 percent, or $79.2 billion, in June.
“While the fund was adversely impacted by broad declines in public equity markets, I had virtually no losses due to credit or counterparty exposures in this period,” David Denison, president and chief executive officer of CPPIB, said in a statement.
CPPIB’s actual private equity allocation was 13.1 percent of its total assets, or $15.4 billion, during the same period, up from 11 percent, or $14.1 billion, in the first quarter of 2008. Infrastructure also rose to 3.1 percent compared to an actual allocation of 2.6 percentage in June.