The Toronto-based company is also outsourcing its building leasing functions, initially to JLL on a short-term contract and later to a number of brokerages. The leasing move is in effect immediately, affected employees were told last week.
“We can confirm we have made changes to our operating model in Canada and our regional coverage strategy in North America,” a Manulife spokesperson wrote in an exchange of emails with RENX. “In Canada, we are evolving our organization away from property operations to refocus our business as an entrepreneurial investment manager.
“As part of this repositioning, all Canada property operations will move to JLL in March 2023. We have a short-term contract with JLL for leasing services, and thereafter leasing will be provided by a range of brokerage firms.”
"Global relationship" with Manulife
Up to 50 current Manulife employees are affected, although it is not immediately known how many might be transitioned to JLL as it takes on the additional properties within its property management division.
“We are thrilled to partner with Manulife Investment Management to deliver property management and building operations services in Canada,” a JLL spokesperson wrote in reply to queries from RENX.
“As part of a global relationship, JLL will focus on supporting Manulife to achieve operational efficiencies and long-term performance.”
JLL is a major property manager across North America. In Canada, the firm is responsible for 85 properties comprising 22 million square feet. Across North America, that total is over 4,000 buildings and over 800 million square feet of space.
The properties span the entire range of CRE sectors, from office and retail to industrial and multiresidential. All are managed for third-party clients.
Neither Manulife nor Chicago-headquartered JLL provided any further details on the transfer of duties. Neither company provided an executive to discuss the moves.
Manulife's real estate portfolio
Manulife IM holds interests in a real estate portfolio spanning 63 million square feet in 29 cities in Canada, the United States and other countries, according to its website.
The properties span all four major sectors including industrial, retail, office and multiresidential.
However, Manulife’s Q3 2022 financial results might have offered up a portent of things to come.
As economic uncertainty has grown, major companies in a variety of sectors have made staff layoffs and business adjustments in advance of what many fear is a looming recession.
“Expense efficiency continues to be a key strategic priority and important lever in the current operating environment,” Manulife CFO Phil Witherington wrote in the report.
“Our third quarter general expenses were held in line with the prior year, providing an offset to topline pressure.”
Overall, Manulife reported quarterly net income of $1.3 billion, core earnings of $1.3 billion and global wealth and asset management net inflows of $3 billion.
Its net income was down from $1.5 billion in 2021 and core earnings were also down 14 per cent year-over-year.
EDITOR'S NOTE: This article was updated to clarify the move affects Manulife IM's property management functions only in Canada. RENX was able to clarify this detail as a result of additional information provided by Manulife IM after the original article was published.