global cities - schroders · schroder global cities real estate fund discrete yearly performance q1...
TRANSCRIPT
Marketing material for professional investors or advisers only. This material is not suitable for retail clients
Schroders Investment Conference 2018, Manchester
22 May 2018
#SICM18
@Schroders_UK
Hugo Machin, Co-Head of Global Real Estate Securities
Global Cities
Global Cities Ecommerce
1
Source; Morgan Stanley, Schroders. For illustrative purposes only and not to be considered a recommendation to buy or sell.
2
Structural changeWhich sector is next?
74cities
30%cheaper than
traditional space
Doubled membership for last
3 years234
Locations across
22countries
220,000 members
91%occupancy
Global lifestyle brand
WeWorkLabs WeLive Rise by We
Source: WeWork, April 2018. Stocks shown are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.
3
Source: Foursquare, November 2015. Video shows population behaviour by activity as tracked by mobile check-in data.For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Global CitiesEach city has a unique pulse
Global Cities Ranking Company City Score Company Long-Term Index
4
Source: Schroders.
Investment processStage 1 – Unique Global Cities research
Quantify long-termpricing power
BostonScore 8.20/10 Rank 3
Exclusive global city focus listAsset database calculatesGlobal city exposure
5
Source: Schroders, June 2017. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Global CitiesCreating an index
6
Source: Schroders, June 2017. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Global CitiesRanking cities
Global CitiesRanking cities
7
Source: Schroders, company reports, 2017. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Global CitiesMapping companies
8
Source: Schroders, company reports, 2017. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Global CitiesMapping companies
9
Source: Schroders, company reports, 2017. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Global CitiesMapping companies
10
Source: Schroders, company reports, 2017. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Global CitiesRexford vs. Eastgroup
11
Source: Schroders, company reports, 2017. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Global CitiesRexford vs. Eastgroup
12
Source: Schroders, company reports, 2017. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
ESG Balance sheet Valuation
13
Source: Schroders.
Investment processStage 2 – Risk and valuation analysis
Assess corporate risk Long-term investmentCalculate total return
Global Citiesportfolio
Investment processAssessing risk
14
Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Maximum single stock limit of 6% is
starting point
Investment frameworkSystematic process
15
Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Companies are ranked by recommended
investment position
Sovereign Wealth FundMulti generational horizon
16
Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Sovereign Wealth FundMulti generational horizon
17
Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
18
Past performance is not a guide to future performance and may not be repeated. Source: Schroders, 30 April 2018. Z Acc shares, GBP, NAV to NAV (bid to bid), adjusted for dividends, net of ongoing charges.Performance shown over last three years to show performance since Tom Walker and Hugo Machin started managing the portfolio in October 2014.
Global CitiesPerformance since managing the portfolio
-10
0
10
20
30
40
50
Q4 2014 2015 – Full year 2016 – Full year 2017 – Full year YTD – 2018
Global Cities cumulative CPI cumulative
Return % Global Cities Z Acc average performance: +8.24% p.a.
19
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.
1YTD performance is taken from data as at 1 January 2018–30 April 2018.2Current Manager takeover date 1 Oct 2014.3Source: Schroders, Z Acc shares, GBP, NAV to NAV (bid to bid), adjusted for dividends.
Schroder Global Cities Real Estate FundPerformance (net of fees)
GBP YTD1 2017 2016 2015 Current manager2
Current manager
annualised
Schroder Global Cities Real Estate Z Acc3 -4.22% 4.15% 19.87% 5.10% 41.64% 8.24%
Periods to 30 April 2018
Schroder Global Cities Real Estate – risk factorsFunds which invest in a smaller number of stocks can carry more risk than funds spread across a larger number of companies. Funds that focus on specific sectors can carry more risk than funds spread over a number of different industry sectors. The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. The fund is not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason the comparison index should be used for reference only. Equity prices fluctuate daily, based on many factors including general, economic, industry or company news. Investments in smaller companies can be less liquid than investments in larger companies and price swings may therefore be greater than in larger company funds. In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses. The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the fund, potentially creating a partial or total loss for the fund. A derivative may not perform as expected, and may create losses greater than the cost of the derivative. The fund uses derivatives for leverage, which makes it more sensitive to certain market or interest rate movements and may cause above-average volatility and risk of loss.
20
Source: Schroders, bid to bid with net income reinvested to 31 March 2018, Z Acc share class, net of fees in GBP.
Schroder Global Cities Real Estate FundDiscrete yearly performance
Q1 2018–Q1 2017 Q1 2017–Q1 2016 Q1 2016–Q1 2015 Q1 2015–Q1 2014 Q1 2014–Q1 2013
Schroder Global Cities Real Estate Z Acc -5.28% +16.29% -0.63% +27.93% -6.69%
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.
Appendices
Global CitiesCapital allocation over the last 12 months
22
Source: Schroders, December 2017, bubbles are not to scale and returns are indicative of process rather than forecasts.
Buy
Hold
Sell
12 months+
Global cities portfolio
Expected hold period
Acquisitions
DisposalsCapital flow
Expected return
15%+
5–10%
<5%
Global CitiesCapital allocation over the last 12 months
23
Source: Schroders, December 2017, bubbles are not to scale and returns are indicative of process rather than forecasts.
Buy
Sell
Expected hold period
Acquisitions
Disposals
Expected return
15%+
<5%
– Positions closed total = 14.9% – 14 stocks– Average market cap $12.6bn
– Positions opened total = 14.4%– 15 stocks – Average market cap $7.1bn
12 months+
Locally based research teamLocal knowledge of markets and sector drivers
24
Source: Schroders, as at May 2018. Blue box indicates a REIT specialist.
Jon Consolo– Joined Schroders in 2014– 12 years’ experience– BA in Finance and Real Estate, CAIA
Ben Forster– Joined Schroders in 2008– 8 years’ experience – BEng Prod Design and Manufacture, CFA
Ryan Bennett– Joined Schroders in 2014– 11 years’ experience – BSc Finance and
Management, CFA
Adam Osborn– Joined Schroders in 2002– 25 years’ experience– BSc in Economics
Siew Ling Tan, Singapore– Joined Schroders in 2013– 9 years’ experience– Degree in Accountancy and Mgt, CFA
Rebecca Xu, China– Joined Schroders in 2010– 7 years’ experience– BA in Journalism, MPhil in Management
Daniel Peters, Australia– Joined Schroders in 2008– 18 years’ experience– Bachelor of Commerce, CFA
Masaaki Nishikori, Japan– Re-joined Schroders in 2004– 28 years’ experience– BA in Law, MBA
Hugo Machin– Joined Schroders in 2014– 17 years’ Real Estate Securities experience– BA Hons in English Literature, MSc in Real Estate Finance and Investment, Diploma
in Cross Border Valuation
Tom Walker– Joined Schroders in 2014– 17 years’ Real Estate Securities experience– BA Hons in Politics, Graduate Diploma in Real Estate, MRICS
Additional research collaboration with four US-based analysts covering real estate as part of their broader equity coverage
James Blake– Joined Schroders in 2017– 11 years’ experience– BSc Geography and Geographical
Information Systems
Share price
25
Source: Bloomberg, Schroders. Past performance is not a guide to future performance and may not be repeated.For illustrative purposes only and not to be considered a recommendation to buy or sell.
Case study: Rexford Industrial Realty (NYSE: REXR)Strong fundamentals and acquisition volume has lifted REXR
$10
$15
$20
$25
$30
$35
30 Sep 15 31 Dec 15 31 Mar 16 30 Jun 16 30 Sep 16 31 Dec 16 31 Mar 17 30 Jun 17
Rexford Industrial Realty
SDR accumulates initial position of 90bps in 4Q 2015
SDR adds 80bps to position in 1Q–2Q16
Case study: Rexford Industrial Realty (NYSE: REXR)Step 1: Global Cities exposure qualifies for LTI inclusion
26
Source: Schroders, Rexford Industrial Realty, First Industrial. For illustrative purposes only and not to be considered a recommendation to buy or sell.
Case study: Rexford Industrial Realty (NYSE: REXR)Step 1: Global Cities exposure qualifies for LTI inclusion
27
Source: Schroders, Rexford Industrial Realty, First Industrial. For illustrative purposes only and not to be considered a recommendation to buy or sell.
Focused on THE Global City… Los Angeles
28
– Approximately 90% of Rexford’s portfolio is situated in Los Angeles (Global Cities score of 8.5), the top ranked city in the Schroders Index
– The Port of Los Angeles and the Port of Long Beach, the two largest shipping ports in the United States and the 19th and 20th largest in the world, help to drive industrial demand in Los Angeles
– The emergence of e-commerce drives incremental demand for in-fill warehouse space to get goods to consumers in a timely manners
Source: Schroders, Rexford Industrial Realty, First Industrial. For illustrative purposes only and not to be considered a recommendation to buy or sell.
Case study: Rexford Industrial Realty (NYSE: REXR)Step 1: Global Cities exposure qualifies for LTI inclusion
SDR proprietary mapping tool
Global Cities hurdle: 6.7/10
Global Cities score = 8.5/10
29
Source: Schroders. Numbers and percentages represent scores and weights applied to each score.For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Case study: Rexford Industrial Realty (NYSE: REXR)Step 2: Generating a risk score
20%Balance sheet
6.6
40%Management/ESG
7.6
40%Franchise value/other
7.0
REXR Risk Score = 7.2/10.0
70% 40%20% 10% 45%
Leverage
6.7
Debt Terms
5.5
Capital Needs
8.2
40% 15%
Management capability
9.0
Alignment/Governance
6.8
Environment/Social
5.7
40% 20%
Portfolio positioning
8.5
Tenant health
5.0
Operational scale
6.8
30
Source: Schroders, Rexford Industrial Realty, Bloomberg, December 2016. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Case study: Rexford Industrial Realty (NYSE: REXR)Risk score components: Balance sheet – 6.6/20%
70%Leverage
6.7
20%Debt terms
5.5
10%Capital needs
8.2
Balance Sheet = 6.6
– LTV: 32% (low is preferred) vs. US average of 35%
– Credit metrics and access to capital– BBB- rating by Fitch– Average maturity of 6 years– 100% fixed rate debt
– No ground-up development, manageable redevelopment pipeline
– Unfunded redevelopment pipeline represents only 1.4% of gross asset value
31
Source: Schroders, Rexford Industrial Realty, Green Street Advisors, Bloomberg. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Case study: Rexford Industrial Realty (NYSE: REXR)Risk score components: Management/ESG – 7.6/40%
45%Management
capability
9.0
40%Alignment and
Governance
6.8
15%Environment
and Social
5.7
Management/ESG = 7.6
– CEO with over 30 years experience of industrial leasing and investment in Southern California
– Internalized leasing and construction teams– Track record of delivering on financial goals
– Separated Chairman and CEO roles– Compensation in the lower 25th percentile adjusting
for company size and stock performance– Management hold ~1% of outstanding shares,
below average relative to peers
– By recycling urban buildings, Rexford contributes to improved health and welfare of local communities at a substantially reduced environmental impact or carbon footprint as compared to demolition, disposal and new ground-up construction which is prevalent in Los Angeles
– However, because the company is still in rapid growth mode, it has yet to outline a long-term sustainability plan with concrete targets
32
Source: Schroders, Rexford Industrial Realty, Bloomberg. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
Case study: Rexford Industrial Realty (NYSE: REXR)Risk score components: Franchise value/Other – 7.0/40%
40%Portfolio
positioning
9.5
40%Tenant health
5.0
20%Operational
scale
6.0
Franchise value/other = 7.0
– Focused on dense in-fill submarkets, mostly within Los Angeles
– Diversified tenant base by industry mitigates downside risk
– However, focus on smaller facilities has resulted in small business tenants with little financial visibility
– Operates approximately 16 million square feet per market, providing economies of scale on property management
– However, controls only 1% of the LA market limiting pricing power
33
– Near-term cash flow estimates: Driven by bottom-up supply/demand forecasts – highest conviction
– Intermediate Cash Flow Estimates: Model company though an economic cycle based on historical performance
– Terminal value: Driven by long-term growth rate of 3.3% and a cost of equity of 8%– Long-term growth determined by analyst based on quality of
assets and ESG initiatives
Source: Schroders, Rexford Industrial Realty, Bloomberg, December 2016. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.Forecast risk warning: Please see the information slide at the end of this presentation.
Case study: Rexford Industrial Realty (NYSE: REXR)Step 3: Valuation
Field:
Sub-field Scoring output Portfolio positioning
Metric:Risk
CountrySub-sector
Market
Cap (USD)
Free
Float %
Days to
trade
50bps OW
[STEP 1]
Risk
score
Max
Potential
Position
[STEP 2]
Valuation
score
Model portfolio weighting
Range based on risk score
Position based on valuation upside
Tgt
absAdj req
PLATFORM OWNERSHIP 1.4 6.0 5.0
DUKE REALTY CORP US Industrial 10,444 99.6% 0.2 6.7 4.0% 4.0 1.6% -0.9%
PROLOGIS INC US Industrial 33,897 99.2% 0.2 7.0 4.2% 1.0 0.4% +0.4%
REXFORD INDUSTRIAL REALITY INC US Industrial 2,141 99.3% 2.0 7.2 4.3% 3.2 1.4% -1.3%
TERRENO REALTY CORP US Industrial 1,922 97.4% 2.3 7.3 4.4% 2.2 0.9% -0.8%
PS BUSINESS PARKS INC/CA US Industrial 3,619 72.3% 2.2 6.2 3.7% 0.1 0.0% +0.0%
+2% +3% +4% +5% 6%
Market
+0% +1%
STOCK DESCRIPTIONHIDE ALL PORTFOLIOS
UNHIDE ALL PORTFOLIOS
ACTIVE PORTFOLIO ONLY
0%
5%
10%
15%
20%
25%
30%
$0.00
$0.50
$1.00
$1.50
$2.00
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026CF per share Y/Y change
12-month price target driven by 10-year DCF
Value score derived from comparing total return to other potential investments
Regional/country exposure Top 10 holdings
34
Asia 26.8%
Hong Kong 9.1%
Australia 6.0%
Japan 10.2%
Other Asia 1.5%
Europe 19.0%
France 3.0%
UK 5.3%
Other Europe 10.7%
North America 53.9%
USA 50.7%
Canada 2.6%
Mexico 0.6%
Source: Schroders. Portfolio weights shown are excluding cash. Securities and countries shown are for illustrative purposes only and not a recommendation to buy or sell. Data subject to rounding.
Fund positioningSchroder Global Cities Real Estate Fund as at 30 April 2018
Security Country Sector Portfolio weight %
Alexandria Real Estate Equities United States Office 5.2%
Rexford Industrial Realty United States Industrial 3.6%
Sun Hung Kai Properties Hong Kong Diversified 3.5%
Terreno Realty United States Real Estate 3.1%
Howard Hughes United States Retail 3.1%
Interxion Holding Netherlands Office 3.0%
Deutsche Wohnen Germany Real Estate 2.7%
Duke Realty United States Real Estate 2.6%
Healthcare Realty Trust United States Healthcare 2.6%
Mitsubishi Estate Co Japan Real Estate 2.6%
32.0%
35
Source: IPD/MSCI, FTSE Russell, Schroders, 31 October 2017.
Blending global listed real estate with direct exposureData supports superior total returns compared with domestic-only exposure
0
3
6
9
12
15
3 years
IPD UK monthly FTSE EPRA/NAREIT developed index GBP 70:30 (unlisted:listed) composite index
Returns to 31 October 2017% p.a.
0
3
6
9
12
15
5 years
IPD UK monthly FTSE EPRA/NAREIT developed index GBP 70:30 (unlisted:listed) composite index
Returns to 31 October 2017% p.a.
0
3
6
9
12
15
10 years
IPD UK monthly FTSE EPRA/NAREIT developed index GBP 70:30 (unlisted:listed) composite index
Returns to 31 October 2017% p.a.
0
3
6
9
12
15
15 years
IPD UK monthly FTSE EPRA/NAREIT developed index GBP 70:30 (unlisted:listed) composite index
Returns to 31 October 2017% p.a.
36
Source: Datastream, MSCI, Schroders, as at 30 September 2017. Analysis based upon quarterly data from Q4 1989 to Q3 2017. Note. A correlation of 1 indicates that the two series rise and fall in parallel. A correlation of -1 indicates that the series move in opposite directions. A correlation of 0 indicates no relationship between the two series.
Real estate securities reflect the underlying market over timeUK listed real estate securities correlations over different holding periods
0.0
0.2
0.4
0.6
0.8
1.0
6 months 1 year 2 years 3 years 4 years 5 years 10 years
Correlation with direct property – AREF/IPD All Property Funds Correlation with FT All Share
Correlation coefficient %
Holding period
Global CitiesYear to date performance
37
Source: Schroders. Bloomberg, April 2018. Performance is net of fees.
-12.0
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
01 Jan 18 11 Jan 18 21 Jan 18 31 Jan 18 10 Feb 18 20 Feb 18 02 Mar 18 12 Mar 18 22 Mar 18 01 Apr 18 11 Apr 18 21 Apr 18
GCs Upside 01/01/18 +6.6%
Total return (%)
GCs Upside 05/03/18 +17.8%
Past performance is not a guide to future performance and may not be repeated.
Global CitiesPerformance on the US 10 year over three years
38
Source: Schroders, Bloomberg, March 2018.
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
2.8
3.0
3.2
09 F
eb 1
509
Mar
15
09 A
pr 1
5
09 M
ay 1
5
09 Ju
n 15
09 Ju
l 15
09 A
ug 1
5
09 S
ep 1
5
09 O
ct 1
5
09 N
ov 1
5
09 D
ec 1
5
09 Ja
n 16
09 F
eb 1
6
09 M
ar 1
6
09 A
pr 1
6
09 M
ay 1
6
09 Ju
n 16
09 Ju
l 16
09 A
ug 1
6
09 S
ep 1
6
09 O
ct 1
6
09 N
ov 1
6
09 D
ec 1
6
09 Ja
n 17
09 F
eb 1
709
Mar
17
09 A
pr 1
7
09 M
ay 1
7
09 Ju
n 17
09 Ju
l 17
09 A
ug 1
7
09 S
ep 1
7
09 O
ct 1
7
09 N
ov 1
7
09 D
ec 1
7
09 Ja
n 18
09 F
eb 1
809
Mar
18
09 A
pr 1
8
+90%
+40%
US benchmark 10 year DS Govt. Index – RED. Yield
Past performance is not a guide to future performance and may not be repeated.
US Federal Reserve policy vs. US real estate securities performance
Real estate securitiesReal estate securities can outperform in rising interest rate environment
39
Performance returnBase = 100
US Fed funds target rate%
0
1
2
3
4
5
6
90100110
120130140150160170
180190
Jan 2004 Jul 2004 Jan 2005 Jul 2005 Jan 2006 Jul 2006
FTSE EPRA/NAREIT USA return US Federal Funds Target Rate
Source: Datastream, Factset, Schroders as at 31 January 2015.
Past performance is not a guide to future performance and may not be repeated.
Schroder Global Cities to 7 May 2018Outperformance in a rising rate environment
40
Source: Thomson Reuters, May 2018. The security shown above is for illustrative purposes only and are not to be considered a recommendation to buy or sell.
10 year US government bond yield to redemption Global Cities Fund
0%
1%
2%
3%
4%
5%
6%
1.8%
2.0%
2.2%
2.4%
2.6%
2.8%
3.0%
3.2%
01/11/2016 01/02/2017 01/05/2017 01/08/2017 01/11/2017 01/02/2018 01/05/2018
Alpha creation (RHS) 10 year US govt bond yields (LHS)
Past performance is not a guide to future performance and may not be repeated.
Portfolio changes year to dateRebalancing the portfolio towards higher upside potential
41
Source: Schroders, February 2018. Stocks shown are for illustrative purposed only and not a recommendation to buy or sell.
Simon Property
Camden Property
Vornado Realty
Retail Opportunity Investment
Great Portland Estates
Average upside of disposals:
4.4%
19.8%
Average upside of investments:
c. 13% of portfolio traded21 Vianet Group
Five Point Holdings
Existing holdings
Shaftesbury – portfolio reversionSustained growth in rents through economic cycles
Source: Shaftesbury, Investor and Analyst Presentation as at 31 March 2017. ¹Includes 50% share of Longmartin. For illustrative purposes only and not a recommendation to buy or sell.
42
49.8 53.9 56.0 59.0 62.0 64.0 74.0 79.0 83.0 91.0 96.0107.0 112.0
60.6 66.0 69.0 79.0 78.0 80.0 89.0 97.0 103.0114.0 124.0
135.0 142.0
0
20
40
60
80
100
120
140
160
Sep 05 Sep 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17Annualised Current Income¹ Estimated Rental Value¹
10 year L-f-L CAGR
Annualised current income 4.9%
ERV 4.8%
£m
23%35% 25% 25%
24%22%21%
26%
29%26%
27%
22%22%
The global economyRisks to history repeating itself
43
Source: Schroders, February 2018.
Economic recovery slows
Stagflation
Global recession
Macro event(economic or political)
Structural changeDisruptive capitalism
44
Source: Bloomberg as at 23 April 2018. Shareprice data source: NNASDAQ as at 23 April 2018. Companies shown for illustrative purposes and should not be viewed as a recommendation to buy or sell.
0
1,000
2,000
3,000
4,000
5,000
6,000
30 A
pr 0
3
31 O
ct 0
3
30 A
pr 0
4
31 O
ct 0
4
30 A
pr 0
5
31 O
ct 0
5
30 A
pr 0
6
31 O
ct 0
6
30 A
pr 0
7
31 O
ct 0
7
30 A
pr 0
8
31 O
ct 0
8
30 A
pr 0
9
31 O
ct 0
9
30 A
pr 1
0
31 O
ct 1
0
30 A
pr 1
1
31 O
ct 1
1
30 A
pr 1
2
31 O
ct 1
2
30 A
pr 1
3
31 O
ct 1
3
30 A
pr 1
4
31 O
ct 1
4
30 A
pr 1
5
31 O
ct 1
5
30 A
pr 1
6
31 O
ct 1
6
30 A
pr 1
7
31 O
ct 1
7
AMAZON.COM SEARS HOLDINGS
$3.1 per share
$1,528.1 per share
Structural changeOnline retail growth
Source: Schroders, Fevad, February 2018. Forecast risk warning: Please see the information slide at the end of this presentation.
45
14% p.a.
forecast for 2 years
Revenue growth of
+ €10 bn p.a14% p.a. forecast for 2 years
Structural changeOnline growth = new supply
Source: Schroders, Fevad, February 2018. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.
46
1
2
3
4
7
6
5
9
10
8
11
12
13
14
17
16
15
19
20
18
Year 1 Year 2
47
23%
-36%
-20%
Source: FactSet as at 23 April 2018. Share price peak date: Hammerson plc : 5 February 2018 , Unibail-Rodamco, 12 February 2015, Simon Property Group: 03 August 2016, Intu Properties Plc = 04 January 2011, Westfield Corp: 26 January 2016.Stocks shown are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.
-26%
-48%
Structural changeHow much has the value of retail assets changed?
48
Source: FactSet April 2018. Stocks shown are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.
IntuPoor outcome for investors
Share price index 7 Jan 2011: Board persuades investors to reject bid. Implies future
value of 625p
1.50
2.00
2.50
3.00
3.50
4.00
04 Ja
n 10
04 Ja
n 11
04 Ja
n 12
04 Ja
n 13
04 Ja
n 14
04 Ja
n 15
04 Ja
n 16
04 Ja
n 17
04 Ja
n 18
Intu Properties plc (INTU-GB)
15 Dec 2010: Intu trading at 377p, Simon offers 425p
49
Source: Intu (January 2011), Bloomberg (October 2017). Share price data as at 23 April 2018.Stocks shown are for illustrative purposes only and should not be viewed as a recommendation to buy or sell.
HammersonIs the NAV correct?
31 December 2017: Hammerson EPRA NAV per share =776p
8 March 2018: Klepierre’s offer at 635p rejected
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
2015 2016 2017 2018Hammerson plc (HMSO-GB)
Portfolio holdings – current and historicPositioned for structural change
Source: Schroders, March 2018. Funds that focus on specific sectors can carry more risk than funds spread over a number of different industry sectors. The sectors above are shown for illustrative purposes only and are not to be considered a recommendation to buy or sell.
50
20
0
6
887
1514
0
5
10
15
20
25
Retail Data Centres Industrial Specialty
31 March 2015 31 March 2018
Sector weightings%
Global Cities
51
Source: Schroders.
TOTAL RETURN
52
For more information please visit:
@GlobalCities_www.schrodersglobalcities.com
Thank you
Disclaimer
54
For professional investors or advisers only. This material is not suitable for retail clients.
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.
The views and opinions contained herein are those of Hugo Machin and Tom Walker, Co-Heads of Global Real Estate Securities. They do not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds and are subject to change.
This presentation is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroder Unit Trusts Limited (Schroders) does not warrant its completeness or accuracy. No responsibility can be accepted for error of fact or opinion. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions.
Risk factors:
The forecasts included in this document should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change. We accept no responsibility for any errors of fact or opinion and assume no obligation to provide you with any changes to our assumptions or forecasts. Forecasts and assumptions may be affected by external economic or other factors.
Funds which invest in a smaller number of stocks can carry more risk than funds spread across a larger number of companies. Funds that focus on specific sectors can carry more risk than funds spread over a number of different industry sectors. The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses. The fund is not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason the comparison index should be used for reference only. Equity prices fluctuate daily, based on many factors including general, economic, industry or company news. In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares. Failures at service providers could lead to disruptions of fund operations or losses. The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the fund, potentially creating a partial or total loss for the fund. A derivative may not perform as expected, and may create losses greater than the cost of the derivative. The fund uses derivatives for leverage, which makes it more sensitive to certain market or interest rate movements and may cause above-average volatility and risk of loss.
Issued in May 2018 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: 4191730 England. Authorised and regulated by the Financial Conduct Authority. PRO01019
ContactAdvisory sales desk: +44 (0) 207 658 3894
Asset Manager sales desk: +44 (0) 207 658 3210
Schroder Investment Management Limited,
31 Gresham Street, London EC2V 7QA.
schroders.com