Press Release: January 26, 2005
Income trusts and REITs included in S&P/TSX Composite Index
Sector achieves mainstream recognition
Toronto, January 26, 2005 – Today, Standard and Poors announced the inclusion of income funds and REITs in the S&P/TSX Composite Index resulting in a more representative Canadian “equity” asset class. Until now, income funds were listed in three separate indices including the S&P/TSX Capped Income Trust Index, S&P/TSX Capped Energy Trust Index and the S&P/TSX Capped REIT Index. Long awaited by the income fund sector, this announcement may lead to significant investment by institutional investors in income trusts and REITs listed in the S&P/TSX Composite Index. “This announcement is a recognition and acknowledgement of the importance of the income fund sector in Canadian capital markets”, said Margaret Lefebvre, Executive Director of the Canadian Association of Income Funds (CAIF).
S&P estimated in its October 2004 paper on income trust inclusion that this will likely result in the addition of 56 new constituents, representing 8% of total market capitalization in the current S&P/TSX Composite Index. As of January 21, 2005, income funds represent approximately $123 billion in market capitalization across 175 issuers, which include 26 Real Estate Investment Trusts (REITs) with approximately $18 billion in market capitalization.
This is a very positive development for REITs and income trusts in Ontario, and indeed in Canada. “With the longstanding doubt about limited liability formally erased with the passage of the Ontario Trust Beneficiaries Liability Act, 2004, in December, and similar legislation in Alberta and Quebec, we hope that this announcement by S&P will further encourage investors to consider the dynamic and growing income trust and REIT sector as part of their investment portfolio,” said Michael Brooks, Executive Director of the Canadian Institute of Public and Private Real Estate Companies (CIPPREC).
CAIF and CIPPREC would like to thank Standard and Poors for the opportunity to participate in the consultation process prior to this announcement and commend this important milestone. “It is clear to us that S&P together with the TSX ran a very professional and transparent process leading up to this important decision. All points of view were given the opportunity to provide comment and every position was considered fully”, said Stephen Rotz, Vice President, CAIF.
Canadian Institute of Public and Private Real Estate Companies
CIPPREC is the senior national real property association whose mission is to bring together Canada’s real property investment leaders to collectively influence public policy, to educate government and the public, and to ensure stable and beneficial real estate capital and property markets in Canada. CIPPREC members currently own in excess of CDN $80 Billion in real estate assets located in the major centres across Canada and include real estate investment trusts, publicly traded and large private companies, banks, brokerages, crown corporations, investment dealers, life companies, and pension funds. Visit CIPPREC at www.cipprec.ca.
Canadian Association of Income Funds
In 2003, the heads of Canada’s leading income funds created the Canadian Association of Income Funds (CAIF)/L’Association Canadienne des Fonds de Revenues (ACFR). CAIF is designed to represent income funds and promote the interests of their stakeholders.
For additional information please contact:
Michael Brooks, Executive Director, CIPPREC, office 416-642-2700 ext. 25, mobile 416-540-1249.
Stephen Pincus, Partner, and Chair, Income Funds Group, Goodmans LLP, Director, and Chair, Governance Committee, Canadian Association of Income Funds, 416-597-4104.