IMCO invests in affordable housing, logistics, power markets

The Investment Management Corp. of Ontario is investing in an affordable housing fund to build apartments in Toronto and Vancouver.

The IMCO is committing $60 million to the Kingsett Affordable Housing LP Fund, managed by Kingsett Capital Inc. The investment comes as vacancy rates in both cities continue to decline due to unaffordability and lack of options, reaching 1.5 per cent in Toronto and 1.1 per cent in Vancouver in 2019, according to a report by the Canadian Mortgage and Housing Corp. 

Affordable unit vacancy rates in both cities are at virtually zero per cent, it said, and the average rent for a two-bedroom unit in Canada has increased 24.6 per cent over a 10-year period. Toronto (29.8 per cent) and Vancouver (50.1 per cent) well outpaced the rest of the country.

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“There is a housing unaffordability problem in Canada that has been driven by many factors, most notably a lack of supply of purpose-built rental properties, as most multi-residential development projects in Canada are on for-sale condominium product,” said Brian Whibbs, managing director of real estate at the IMCO, in a press release. “Our commitment to the Kingsett Affordable Housing Fund will deliver value to our clients, while creating sustained long-term growth and improving communities we live and work in.”

The IMCO also announced a $150-million commitment to a joint venture with WPT Industrial Real Estate Investment Trust, which will see the institutional investor increase its exposure to industrial properties in strategic U.S. logistics markets within WPT’s real estate portfolio.

The joint venture has closed on its first investment, a 772,800-square-foot industrial development in Burlington County, N.J. The REIT will manage any properties acquired by the joint venture.

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“Consumers are relying on e-commerce more than ever and expect robust inventories and rapid delivery times throughout the U.S.,” said Whibbs. “Our joint venture with the REIT is well-aligned to IMCO’s real estate strategy to invest in logistics networks that help meet consumer demands and diversify our portfolio to include industrial.” 

The IMCO has also established an exclusive partnership with Valence Energy Capital Corp., where Valence will identify and source investment opportunities in select power markets around the world.

“From an investment portfolio perspective, power assets can offer a variety of exposures but generally do offer diversification benefits and can offer strong risk-adjusted returns,” said Tim Formuziewich, the IMCO’s managing director of infrastructure, in a press release. “With electricity networks increasingly reliant on renewable, non-dispatch energy, we believe value exists by providing energy markets and their customers with flexibility in sourcing renewable energy. We are excited to partner with Valence as it pursues alpha-generating opportunities in the power space for our infrastructure portfolio.”

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