GLOBAL - AFIAA, the foundation owned by 20 Swiss pension funds, has sold three assets in Canada as part of an optimisation of its global real estate portfolio.

The international property investor has sold three "non-strategic" assets in Toronto, Calgary and Mississauga, providing an 8% annual return on its capital since 2005.

The AFIAA will reinvest the profits in larger, newer properties in major cities in North America, Asia Pacific and Europe.

The organisation said the assets were "fairly small properties" requiring "relatively high expenditure on management".

But it added that it would continue to focus on new or recently built assets in top locations distinguished by construction quality and sustainability standards.

Two of the three buildings sold were fairly old. The 2550 Argentia Road office in Mississauga was built in 1987, while the mixed-use building 250 Dundas Street in Toronto was completed in 1983. 111 Country Hills Road office in Calgary is newer, built in 2003.

The AFIAA said it would focus on properties with an investment value of more than CHF20m (€15.8m) going forward to "guarantee an optimum income-expense relationship" in the administration and management of its buildings.

The aim of the investment strategy is to continue increasing the internal value of the portfolio and, in the medium term, achieve a continuous cash-flow yield of more than 6.5% (compared with 5.7% today).

The AFIAA is an investment foundation governed by Swiss law, which invests exclusively in real estate assets outside Switzerland on behalf of tax-exempt Swiss pension funds.
The current portfolio comprises 27 direct investments in North America, Europe and Australia valued at approximately CHF1bn.

Last year, the AFIAA acquired the Quartermile 2 office development in Edinburgh and revealed that it was looking to make investments in Japan and India.