The Ontario Teachers’ Pension Plan’s real estate portfolio value declined 5.9% in 2023.

Teachers’ adjusted the real estate and infrastructure portfolio valuation due to higher interest rates and “:asset-specific events that negatively impacted select investments,” the pension plan’s board said in a news release.

Infrastructure assets fared better as their total valuation dropped a relatively modest 2.8%. But the real estate and infrastructure properties fell far short of their respective 2% and 7.6% growth benchmarks.

Jo Taylor, the pension plan’s president and CEO, said the higher interest rates and real estate and infrastructure asset value declines contributed to the overall pension fund’s underperformance. The total fund value only increased 1.9%, well below its 8.7% growth benchmark.

“The prognosis for real estate, to me, remains pretty challenging,” Jo Taylor, told the Globe and Mail.

He indicated that Teachers’ will lean more towards infrastructure investments outside of Canada because opportunities here are limited and returns are smaller.

Taylor said the higher rates and real estate and infrastructure asset value declines contributed to overall fund’s underperformance. The total fund value only increased 1.9%, well below its 8.7% growth benchmark.