INSURANCE giant Standard Life has raised £65 million by selling two commercial properties in Canada, where critics have suggested the market is in the grip of a bubble.
The Edinburgh pension giant’s subsidiary, the Standard Life Assurance Company of Canada, sold the two office buildings, located in eastern and central Canada, following the sale of two further properties in western Canada, which it said would contribute to a one-off £140m operating profit.
Jackie Hunt, chief financial officer at Standard Life, said: “We have taken advantage of significant demand in the market for premier quality investment properties across Canada, while at the same time reducing exposure to property as an asset class.
“Excluding these transactions, our Canadian business continues to trade in line with expectations.”
She added that the sale “achieved the purpose” of the group’s “focus… on maximising shareholder value and driving more effective management of liabilities”.
Analysts have been critical of the loose fiscal policy of the country’s central bank, the Bank of Canada, headed by the incoming Bank of England governor Mark Carney.
Earlier this week, Carney warned that the Bank of Canada was set to raise interest rates, which have been held at 1 per cent for two years.
It is thought that record low interest rates and a strong “Loonie” – or Canadian dollar – relative to the US dollar have created the conditions for unsustainable levels of household borrowing and a frothy property market. In 2009, the Bank of Canada interest rate hit a low of 0.25 per cent.
Last month, Carney was revealed as the surprise successor to Sir Mervyn King. He will take up the five-year post in June.
Standard Life shares edged up 3.2p to close at 334.6p.