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INVESTMENT PROPERTIES
 12 Months Ended
Dec. 31, 2020
Investment property [abstract]  
INVESTMENT PROPERTIES INVESTMENT PROPERTIES
The following table presents the change in the fair value of the company’s investment properties:
AS AT AND FOR THE YEAR ENDED DEC. 31 (MILLIONS)20202019
Fair value, beginning of year$96,686 $84,309 
Additions8,180 11,638 
Acquisitions through business combinations— 3,669 
Changes in basis of accounting1
193 928 
Dispositions2
(9,284)(6,029)
Fair value changes (269)1,710 
Foreign currency translation and other1,276 461 
Fair value, end of year3
$96,782 $96,686 
1.2019 balance includes the company’s adoption of IFRS 16 resulted in the recognition of ROU investment properties that were previously off-balance sheet items.
2.Includes amounts reclassified to held for sale.
3.As at December 31, 2020, the ending balance includes $90.4 billion (2019 – $88.5 billion) of investment properties leased to third parties. Also includes $3.3 billion of ROU investment properties (December 31, 2019 – $2.6 billion).
Investment properties include the company’s office, retail, multifamily, and other properties as well as highest and best-use land within the company’s sustainable resources operations. Additions of $8.2 billion primarily relates to the enhancement or expansion of properties through capital expenditures and the purchase of investment properties during the year.
Dispositions of $9.3 billion (2019 – $6.0 billion) included the sale of multiple triple net lease investment properties, a portfolio of investment properties within our directly held Fairfield investment, a self-storage portfolio, and a core office asset in London. In addition, the current period includes the reclassification of a portfolio held within Forest City to assets held for sale.
Investment properties generated $5.7 billion (2019 – $5.8 billion) in rental income and incurred $2.5 billion (2019 – $2.4 billion) in direct operating expenses. Most of our investment properties are pledged as collateral for the non-recourse borrowings at their respective properties.
The following table presents our investment properties measured at fair value:
AS AT DEC. 31 (MILLIONS)20202019
Core office
United States$15,093 $15,748 
Canada5,102 4,806 
Australia2,731 2,300 
Europe2,699 2,867 
Brazil309 361 
Core retail20,324 21,561 
LP investments and other
LP investments office8,727 8,756 
LP investments retail2,538 2,812 
Logistics— 94 
Multifamily2,442 2,937 
Triple net lease3,719 4,508 
Self-storage— 1,007 
Student housing2,962 2,605 
Manufactured housing2,784 2,446 
Mixed-use3,096 2,703 
Directly held real estate properties22,350 19,814 
Other investment properties1,906 1,361 
$96,782 $96,686 
Significant unobservable inputs (Level 3) are utilized when determining the fair value of investment properties. The significant Level 3 inputs include:
Valuation TechniqueSignificant Unobservable InputsRelationship of Unobservable Inputs to Fair ValueMitigating Factors
Discounted cash flow analysis1
•  Future cash flows – primarily driven by net operating income
•  Increases (decreases) in future cash flows increase (decrease) fair value
•  Increases (decreases) in cash flows tend to be accompanied by increases (decreases) in discount rates that may offset changes in fair value from cash flows
•  Discount rate
•  Increases (decreases) in discount rate decrease (increase) fair value
•  Increases (decreases) in discount rates tend to be accompanied by increases (decreases) in cash flows that may offset changes in fair value from discount rates
•  Terminal capitalization rate

•  Increases (decreases) in terminal capitalization rate decrease (increase) fair value
• Increases (decreases) in terminal capitalization rates tend to be accompanied by increases (decreases) in cash flows that may offset changes in fair value from terminal capitalization rates
•  Investment horizon
•  Increases (decreases) in the investment horizon decrease (increase) fair value
•  Increases (decreases) in the investment horizon tend to be the result of changing cash flow profiles that may result in higher (lower) growth in cash flows prior to stabilizing in the terminal year
1.Certain investment properties are valued using the direct capitalization method instead of a discounted cash flow model. Under the direct capitalization method, a capitalization rate is applied to estimated current year cash flows.
The company’s investment properties are diversified by asset type, asset class, geography and market. Therefore, there may be mitigating factors in addition to those noted above such as changes to assumptions that vary in direction and magnitude across different geographies and markets.
The following table summarizes the key valuation metrics of the company’s investment properties:
20202019
AS AT DEC. 31Discount
Rate		Terminal
Capitalization
Rate		Investment
Horizon
(years)
Discount
Rate
Terminal Capitalization RateInvestment Horizon (years)
Core office
United States6.9 %5.6 %127.0 %5.6 %12
Canada5.9 %5.2 %105.9 %5.2 %10
Australia6.6 %5.7 %106.8 %5.9 %10
Europe5.2 %3.8 %104.6 %4.1 %11
Brazil7.6 %7.0 %107.9 %7.4 %10
Core retail7.0 %5.3 %106.7 %5.4 %10
LP investments and other
LP investments office9.7 %7.2 %710.0 %7.3 %7
LP investments retail8.7 %7.0 %108.8 %7.3 %10
Mixed-use7.3 %5.2 %107.6 %5.4 %10
Logistics1
— %n/a n/a5.8 %n/a n/a
Multifamily1
4.9 %n/a n/a 5.1 %n/a n/a
Triple net lease1
6.2 %n/a n/a 6.3 %n/a n/a
Self-storage1
— %n/a n/a 5.6 %n/an/a
Student housing1
4.9 %n/a n/a 5.8 %n/a n/a
Manufactured housing1
4.8 %n/a n/a 5.5 %n/a n/a
Directly held real estate properties2
5.1 – 9.3%
5.4 %19 
5.2 – 9.2%
6.1 %19
Other investment properties1,3
5.0 – 8.7%
n/a n/a 8.9 %n/a n/a
1.Logistics, multifamily, triple net lease, self-storage, student housing, manufactured housing and other investment properties are valued using the direct capitalization method. The rates presented as the discount rate represent the overall implied capitalization rate. The terminal capitalization rate and the investment horizon are not applicable.
2.We use either the discounted cash flow or the direct capitalization method when valuing our directly held real estate properties. The rates presented as the discount rate represent the overall implied capitalization rates for investment properties that are valued using the direct capitalization approach.
3.Other investment properties include
Disclosure of significant unobservable inputs used in fair value measurement of assets [text block]
The following table summarizes the valuation techniques and significant unobservable inputs used in the fair value measurement of Level 3 financial instruments:
(MILLIONS)
Type of Asset/Liability
Carrying Value Dec. 31, 2020
Valuation
Techniques
Significant
Unobservable Inputs
Relationship of Unobservable
Inputs to Fair Value
Fixed income securities and other$491 Discounted cash flows•  Future cash flows
•Increases (decreases) in future cash flows increase (decrease) fair value
•  Discount rate
•Increases (decreases) in discount rate decrease (increase) fair value

Corporate bonds
286 Discounted cash flows•  Future cash flows
•Increases (decreases) in future cash flows increase (decrease) fair value
•  Discount rate
•Increases (decreases) in discount rate decrease (increase) fair value
Common shares and warrants1,389 Discounted cash flows•  Future cash flows
•Increases (decreases) in future cash flows increase (decrease) fair value
•  Discount rate
•Increases (decreases) in discount rate decrease (increase) fair value

Black-Scholes model•  Volatility
•Increases (decreases) in volatility increase (decreases) fair value
•  Term to maturity
•Increases (decreases) in term to maturity increase (decrease) fair value
Limited-life funds (subsidiary equity obligations)
(1,380)Discounted cash flows•  Future cash flows
•Increases (decreases) in future cash flows increase (decrease) fair value
•  Discount rate
•Increases (decreases) in discount rate decrease (increase) fair value

•  Terminal capitalization rate
•Increases (decreases) in terminal capitalization rate decrease (increase) fair value
•  Investment horizon
•Increases (decreases) in the investment horizon decrease (increase) fair value
Derivative assets/Derivative liabilities (accounts receivable/payable)135 /  Discounted cash flows  •  Future cash flows  
•Increases (decreases) in future cash flows increase (decrease) fair value
(724)
•  Discount rate
•Increases (decreases) in discount rate decrease (increase) fair value
The significant unobservable inputs (Level 3) included in the discounted cash flow models used when determining the fair value of standing timber and agricultural assets include:
Valuation TechniquesSignificant Unobservable InputsRelationship of Unobservable Inputs to Fair ValueMitigating Factors
Discounted cash flow analysis
•    Future cash flows
•    Increases (decreases) in future cash flows increase (decrease) fair value

•    Increases (decreases) in cash flows tend to be accompanied by increases (decreases) in discount rates that may offset changes in fair value from cash flows


•    Timber / agricultural prices

•    Increases (decreases) in price increase (decrease) fair value

•    Increases (decreases) in price tend to be accompanied by increases (decreases) in discount rates that may offset changes in fair value from price

•    Discount rate /terminal
capitalization rate

•    Increases (decreases) in discount rate or terminal capitalization rate decrease (increase) fair value
•    Decreases (increases) in discount rates or terminal capitalization rates tend to be accompanied by increases (decreases) in cash flows that may offset changes in fair value from rates
•    Exit Date

•    Increases (decreases) in exit date decrease (increase) fair value

•    Increases (decreases) in the exit date tend to be the result of changing cash flow profiles that may result in higher (lower) growth in cash flows prior to stabilizing in the terminal year

Significant unobservable inputs (Level 3) are utilized when determining the fair value of investment properties. The significant Level 3 inputs include:
Valuation TechniqueSignificant Unobservable InputsRelationship of Unobservable Inputs to Fair ValueMitigating Factors
Discounted cash flow analysis1
•  Future cash flows – primarily driven by net operating income
•  Increases (decreases) in future cash flows increase (decrease) fair value
•  Increases (decreases) in cash flows tend to be accompanied by increases (decreases) in discount rates that may offset changes in fair value from cash flows
•  Discount rate
•  Increases (decreases) in discount rate decrease (increase) fair value
•  Increases (decreases) in discount rates tend to be accompanied by increases (decreases) in cash flows that may offset changes in fair value from discount rates
•  Terminal capitalization rate

•  Increases (decreases) in terminal capitalization rate decrease (increase) fair value
• Increases (decreases) in terminal capitalization rates tend to be accompanied by increases (decreases) in cash flows that may offset changes in fair value from terminal capitalization rates
•  Investment horizon
•  Increases (decreases) in the investment horizon decrease (increase) fair value
•  Increases (decreases) in the investment horizon tend to be the result of changing cash flow profiles that may result in higher (lower) growth in cash flows prior to stabilizing in the terminal year
1.Certain investment properties are valued using the direct capitalization method instead of a discounted cash flow model. Under the direct capitalization method, a capitalization rate is applied to estimated current year cash flows.
The following table summarizes the key valuation metrics of the company’s investment properties:
20202019
AS AT DEC. 31Discount
Rate		Terminal
Capitalization
Rate		Investment
Horizon
(years)
Discount
Rate
Terminal Capitalization RateInvestment Horizon (years)
Core office
United States6.9 %5.6 %127.0 %5.6 %12
Canada5.9 %5.2 %105.9 %5.2 %10
Australia6.6 %5.7 %106.8 %5.9 %10
Europe5.2 %3.8 %104.6 %4.1 %11
Brazil7.6 %7.0 %107.9 %7.4 %10
Core retail7.0 %5.3 %106.7 %5.4 %10
LP investments and other
LP investments office9.7 %7.2 %710.0 %7.3 %7
LP investments retail8.7 %7.0 %108.8 %7.3 %10
Mixed-use7.3 %5.2 %107.6 %5.4 %10
Logistics1
— %n/a n/a5.8 %n/a n/a
Multifamily1
4.9 %n/a n/a 5.1 %n/a n/a
Triple net lease1
6.2 %n/a n/a 6.3 %n/a n/a
Self-storage1
— %n/a n/a 5.6 %n/an/a
Student housing1
4.9 %n/a n/a 5.8 %n/a n/a
Manufactured housing1
4.8 %n/a n/a 5.5 %n/a n/a
Directly held real estate properties2
5.1 – 9.3%
5.4 %19 
5.2 – 9.2%
6.1 %19
Other investment properties1,3
5.0 – 8.7%
n/a n/a 8.9 %n/a n/a
1.Logistics, multifamily, triple net lease, self-storage, student housing, manufactured housing and other investment properties are valued using the direct capitalization method. The rates presented as the discount rate represent the overall implied capitalization rate. The terminal capitalization rate and the investment horizon are not applicable.
2.We use either the discounted cash flow or the direct capitalization method when valuing our directly held real estate properties. The rates presented as the discount rate represent the overall implied capitalization rates for investment properties that are valued using the direct capitalization approach.
3.Other investment properties include
Key valuation metrics of the company’s hydroelectric, wind and solar generating facilities at the end of 2020 and 2019 are summarized below.
North AmericaBrazilColombiaEurope
AS AT DEC. 3120202019202020192020201920202019
Discount rate
Contracted
4.1 – 4.5%
4.6 – 4.9%
7.3 %8.2 %8.1 %9.0 %
3.0 – 3.6%
3.5 – 4.0%
Uncontracted
5.6 – 6.0%
6.1 – 6.4%
8.6 %9.5 %9.4 %10.3 %
3.6 – 4.7%
4.0 – 5.3%
Terminal capitalization rate1
5.8 – 6.2%
6.2 – 6.7%
n/an/a8.9 %9.8 %n/an/a
Exit date20412040204820472040203920352035
1.    Terminal capitalization rate applies only to hydroelectric assets in North America and Colombia.
Key valuation metrics of the company’s utilities, transport, midstream, data and sustainable resources assets at the end of 2020 and 2019 are summarized below.
UtilitiesTransportMidstreamSustainable Resources
AS AT DEC. 3120202019202020192020201920202019
Discount rates
7 – 14%
7 – 14%
7 – 13%
7 – 13%
15 %15 %6%
5 – 10%
Terminal capitalization multiples
7x – 23x
8x – 21x
9x – 14x
9x – 14x
10x
10x
6x
5x – 10x
Investment horizon/Exit date (years)10 
10 – 20
10 
10 – 20
5 – 10
5 – 10
10 
3 – 21
We use a discounted cash flow valuation to determine the recoverable amount and consider the following significant unobservable inputs as part of our valuation:
Valuation TechniqueSignificant Unobservable Input(s)Relationship of Unobservable Input(s) to Fair ValueMitigating Factor(s)
Discounted cash flow models
•    Future cash flows

•    Increases (decreases) in future cash flows increase (decrease) the recoverable amount

•    Increases (decreases) in cash flows tend to be accompanied by increases (decreases) in discount rates that may offset changes in recoverable amounts from cash flows
•    Discount rate

•    Increases (decreases) in discount rate decrease (increase) the recoverable amount

•    Increases (decreases) in discount rates tend to be accompanied by increases (decreases) in cash flows that may offset changes in recoverable amounts from discount rates

•    Terminal capitalization rate

•    Increases (decreases) in terminal capitalization rate decrease (increase) the recoverable amount
•    Increases (decreases) in terminal capitalization rates tend to be accompanied by increases (decreases) in cash flows that may offset changes in recoverable amounts from terminal capitalization rates

•    Exit date

•    Increases (decreases) in the exit date decrease (increase) the recoverable amount
•    Increases (decreases) in the exit date tend to be the result of changing cash flow profiles that may result in higher (lower) growth in cash flows prior to stabilizing in the terminal year
The recoverable amounts used in goodwill impairment testing are calculated using discounted cash flow models based on the following significant unobservable inputs:
Valuation TechniqueSignificant Unobservable Input(s)Relationship of Unobservable Input(s) to Fair ValueMitigating Factor(s)
Discounted cash flow models
•    Future cash flows

•    Increases (decreases) in future cash flows increase (decrease) the recoverable amount

•    Increases (decreases) in cash flows tend to be accompanied by increases (decreases) in discount rates that may offset changes in recoverable amounts from cash flows
•    Discount rate

•    Increases (decreases) in discount rate decrease (increase) the recoverable amount

•    Increases (decreases) in discount rates tend to be accompanied by increases (decreases) in cash flows that may offset changes in recoverable amounts from discount rates

•    Terminal capitalization rate/multiple

•    Increases (decreases) in terminal capitalization rate/multiple decrease (increase) the recoverable amount
•    Increases (decreases) in terminal capitalization rates/multiple tend to be accompanied by increases (decreases) in cash flows that may offset changes in recoverable amounts from terminal capitalization rates

•    Exit date/terminal year of cash flows

•    Increases (decreases) in the exit date/terminal year of cash flows decrease (increase) the recoverable amount
•    Increases (decreases) in the exit date/terminal year of cash flows tend to be the result of changing cash flow profiles that may result in higher (lower) growth in cash flows prior to stabilizing in the terminal year