The Healthcare of Ontario Pension Plan (HOOPP) experienced a record return on its real estate portfolio, according to the Toronto-based pension plan’s 2012 annual report.
The C$47.4 billion (€36.2 billion; $46.6 billion) pension plan’s property portfolio delivered an overall return of 18.33 percent, with 12.25 percent coming from capital appreciation. That marks the highest absolute return for the portfolio since 2007 and represents a significant outperformance relative to the IPD benchmark return of 14.1 percent.
“The year was a difficult one in which to make new acquisitions due to the very competitive investment market in Canada,” the report stated. “Much of the focus, therefore, was on the effective asset management of our existing portfolio and the expansion of our development activities.”
Some of HOOPP’s major real estate acquisitions throughout the year included the Marlborough Mall, a Calgary-based shopping center; a 50 percent interest in a new office project under construction at 150 Elgin Street in Ottawa; and a 51 percent stake in Marine Gateway, a mixed office and retail project under construction in Vancouver. In addition, the pension plan sold such non-core holdings as its 50 percent stakes in Trimac House in Calgary and 200 Kent Street in Ottawa, as well as three industrial properties in the greater Toronto area.
Created in 1960, HOOPP represents 274,000 healthcare workers at more than 370 employers across Ontario. At end of 2012, its real estate portfolio had a gross value in excess of C$6.5 billion and net equity of C$5.1 billion, equivalent to 11.58 percent of the plan’s overall assets.