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Manulife Financial Corp MFC-T will outsource its property operations in Canada to commercial real estate broker JLL Inc as part of a long-term strategy to focus on its entrepreneurial investment management unit, Canada’s largest life insurer said Thursday.
Manulife Investment Management, which owns real estate portfolios overseas, will shed 50 jobs as a result of a new restructuring, two sources familiar with the matter told lbl on Thursday. The sources declined to be identified as the details are not public.
Manulife Investment Management, which manages about C$807-billion ($605-billion), benefited from a favorable credit market experience in recent quarters, but that was partially offset by expected returns from its real estate business, Manulife Chief Financial Officer Philip Witherington said. told analysts during post earnings earlier this month.
Toronto-based Manulife will outsource leasing services to Chicago-based JLL under a short-term agreement, after which services will be provided by various brokerage firms, the insurer said in a statement to lbl.
“As part of this realignment, our teams working in Canada property operations will move to JLL in March 2023,” Manulife said. The company did not immediately disclose how many would be affected.
Manulife shares rose 1.1 percent in opening trade, outperforming the financials sub-index, which was up slightly.
Manulife Investment Management’s real estate arm uses a pool of capital to invest in real estate in 29 cities across the United States, Asia and Canada. According to its last annual report, the insurer had real estate investments worth about C$13.2-billion ($9.9-billion) in 2021.
Companies around the world have rushed to rein in costs and lay off workers due to a sharp rise in interest rates. The Bank of Canada raised its benchmark rate by 350 basis points to 3.75 percent from March, a 14-year high. A further increase is expected in December.
Among other financial services firms, Canada’s largest lenders, Royal Bank of Canada and Bank of Montreal, have recently cut jobs in the United States.
JLL Canada said it would help Manulife “acquire operational efficiencies,” but did not disclose any financial details of the company’s collaboration.
Earlier this month, Manulife reported a drop in third-quarter profit, as concerns of an economic slowdown hampered earnings in its wealth and asset management unit.
Manulife Financial to outsource real estate operations in Canada; 50 job cuts are expected
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