CRA indicates that an (s. 149(1)(o.2)(ii)) exempt real estate corp can make “modest and necessary” investments in non-real estate permitted investments

A real estate pension vehicle described in s. 149(1)(o.2)(ii) must limit its activities to the real estate activities or vehicles described in s. 149(1)(o.2)(ii)(A) – while at the same time s. 149(1)(o.2)(ii)(B) prohibits it from making investments other than real estate investments, and permitted investments under pension benefits legislation ("permitted investments").  To what extent can it make permitted investments while still satisfying the activity test?

CRA cautiously responded that "it is possible, in limited circumstances" for permitted investments to be made – for example, it would be OK to make a "modest and necessary" permitted investment in furtherance of the [real estate] activities" in s. 149(1)(o.2)(ii)(A).

Neal Armstrong.  Summary of 14 January 2014 T.I. 2012-0453871E5 F under s. 149(1)(o.2).