RBC Global Asset Management and QuadReal Property Group have acquired an interest in 40 Canadian commercial real estate assets for about $1 billion.

The companies announced the completion of the acquisition Thursday but did not identify the properties or their locations. Toronto-based RBC GAM and Vancouver-based QuadReal acquired the assets through the RBC Canadian Core Real Estate Fund.

RBC launched the fund in October 2019 in partnership with QuadReal and its parent, the British Columbia Investment Management Corporation. QuadReal is BCIM’s real estate investment, development and asset management arm.

The transaction includes a partial acquisition in 40 properties, totalling around $860 million, and the sale of the fund’s stake in five unidentified Canadian assets for approximately $175 million.

The acquisition and divestment were classified as one transaction, marking the fifth completed deal since the fund’s inception.

The latest transaction was funded by the fund’s second unsecured debenture—a $250-million green bond offering rated A (low) by DBRS—and by raising about $500 million in subscriptions.

With the additions, the fund’s gross asset value moved beyond $5 billion and its net asset value (NAV) now exceeds $4 billion. Since its inception, the fund has become one of Canada’s largest core real estate funds, offering Canadian individual and institutional investors access to high-quality, diversified real estate in major cities across the country.

Jennifer Schillaci, managing director and head of real estate equity and mortgage investments at RBC GAM, said the fund has demonstrated resilience during difficult times.

“The rise in interest rates and economic uncertainty over the last two years has presented challenges to the Canadian real estate market, but has also created numerous opportunities for investors who are well capitalized,” she said.

“Against the challenging backdrop created by high interest rates, the fund was able to exceed its subscription targets, complete its second green bond offering, and close one of the largest real estate transactions in the country in 2024. Our ability to execute under these market conditions demonstrates the strength of our aligned partnership structure, the resiliency of our assets and the confidence our clients have in our ability to deliver results. We are also positioned very well for future growth as we head into 2025.”

The fund integrates environmental, social, and governance (ESG) factors into its investments. Proceeds from the recent green-bond offering will fund additional eligible green projects, aligning with the fund’s broader ESG considerations, though it does not have a specific ESG-focused strategy. Recently, the Global ESG Benchmark for Real Assets (GRESB) ranked the fund third in Canada within the Non-Listed Core Diversified category, awarding it a five-star rating for the fourth consecutive year in the 2024 assessment.

“Owing to the fund’s diverse and high-quality portfolio of assets and our unique partnership with BCI and QuadReal, we are executing on our disciplined strategy to provide Canadian institutional and individual investors with one of the most uniquely aligned real estate funds that supports their other portfolio investments,” said Michael Kitt, managing director and head of private markets, at RBC GAM.

Remco Daal, president of Canadian Real Estate at QuadReal, said the fund is underpinned by a high-conviction investment strategy and QuadReal and RBC GAM’s commitment to have a positive impact on the communities that they serve.

“This is a highly complementary venture that continues to deliver value to clients,” he said.