global report may 2017 - catalyst fund managers · 1 global report may 2017 the ftse epra/nareit...

1

GLOBAL REPORTMAY 2017

The FTSE EPRA/NAREIT Developed Rental Index recorded a net total USD return of 0.53% in May. The best performing listed real estate market was Hong Kong, which recorded a total USD return of 6.53%. Australia recorded the lowest total USD return for May of -2.60%.

London office construction remains elevated relative to historic levels. Surveys show that new construction starts are the highest they have been since 2003, while Deloitte is forecasting deliveries of new space in 2017 to be the largest since 2003. A rise in vacancy rates is expected as available space increases, while demolition levels that are 11% higher year-on-year, are a harbinger of future supply.

The city of Berlin's recently published rent tables (Mietspiegel) have shown a record increase of 9.4%. These rent tables detail the maximum rental level that landlords are permitted to hike rents to. This will be beneficial to companies owning apartment units for rental purposes, such as ADO Properties, whose entire portfolio is located in Berlin.

In Hong Kong, a noteworthy commercial site transaction was concluded. The transaction was a sale of the first Central Hong Kong commercial land site in 20 years. Henderson Land acquired the site on Murray Road for HK$23.28bn (USD3bn / USD6500 per square foot) at an estimated yield on cost of 2.4% on completion of development, assuming current Grade-A Central Hong Kong commercial office rents and the maximum allowable Gross Floor Area (GFA).

This transaction illustrates the extent to which investors are stretching underwriting criteria given the insatiable demand exhibited by Chinese investors who are bidding prices up, coupled with severe land constraints. Estimated returns do not seem attractive given that developers are developing well within historically underwritten development returns despite development risks, as well as the assumption of current peak market rent levels for future returns.

Medium-term earnings growth prospects for global real estate stocks remains relatively robust, predominantly due to the lag effect of long term leases and solid current fundamentals. Listed real estate currently trades at an estimated forward FAD (Funds Available for Distribution) yield of 4.86%. Considering current headwinds and tailwinds faced by the global real estate markets, current pricing appears about fairly valued on a long term risk-adjusted basis.

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GLOBAL LISTED PROPERTY REVIEW

Region MAY 2017 (Return %) USD

MAY 2017(Return %) Rand

YTD(Return %) USD

YTD(Return %) Rand

Global Investors Index (NTR)

0.53% -1.15% 2.32% -1.98%

North America -0.82% -2.47% -0.60% -4.78%

Europe 5.47% 3.71% 14.34% 9.53%

Asia ex Australia 3.05% 1.33% 7.40% 2.89%

Australia -2.60% -4.23% -0.23% -4.43%

SA Listed Property Index

1.81% 0.11% 6.47% 1.99%

COUNTRY MARKET CAPITALISATION USD

MILLION

10 YEAR GOVT BOND YIELD

ROLLED YIELD LOCAL CURRENCY

DEBT % LOCAL CURRENCY

Combined Upweighted Global Investors Universe*

990 748 1.73% 3.86% 32.22%

Total North America 654 700 2.17% 3.91% 31.78%

US 630 944 2.21% 3.87% 31.38%

Canada 23 756 1.42% 4.79% 39.33%

Total Europe 187 849 0.55% 3.66% 34.59%

United Kingdom 55 251 1.05% 3.42% 28.21%

Continental Europe 132 598 0.30% 3.79% 37.86%

Total Asia 148 199 1.17% 3.83% 31.54%

Australia 66 670 2.38% 4.53% 31.31%

Japan 16 731 0.04% 2.91% 35.33%

Hong Kong 45 064 1.42% 3.79% 17.29%

Singapore 18 596 2.08% 5.79% 34.99%

New Zealand 1 138 2.73% 5.36% 31.92%

South Africa 44 980 8.59% 6.53% 35.04%

* Universe companies included are only those companies that form part of the Catalyst core universe.

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NORTH AMERICACOMPANY BLOOMBERG

TICKERCOUNTRY MARKET CAP.

USD MILLIONCLOSE LOCAL

CURRENCY CLEAN

PRICE LOCAL CURRENCY

ROLLED YIELD LOCAL

CURRENCY

DEBT % LOCAL

CURRENCYTotal North America 654 700 3.91% 31.78%Total US 630 944 3.87% 31.38%Simon Property Group, Inc SPG US 48 157 154.25 153.95 4.35% 29.24%

Public Storage PSA US 37 438 215.35 213.88 3.55% 14.07%

American Tower C AMT US 55 757 131.19 130.68 1.82% 44.42%

Invitation Homes INVH US 6 679 21.52 21.52 1.15% 44.82%

American Homes 4 Rent AMH US 5 817 22.47 22.47 0.89% 34.78%

Equity Residential EQR US 23 898 65.09 64.56 3.50% 26.67%

Welltower Reit HCN US 26 562 72.54 72.29 4.78% 34.67%

General Growth Properties Inc GGP US 19 665 22.28 22.18 4.50% 39.07%

Avalonbay Communities AVB US 26 350 191.24 190.03 2.90% 23.13%

Ventas VTR US 23 596 66.49 65.65 4.60% 39.31%

Prologis PLD US 29 412 55.54 55.20 3.10% 32.69%

Boston Properties BXP US 18 666 121.32 120.76 2.32% 28.39%

Vornado Realty Trust VNO US 17 457 92.20 91.95 3.02% 36.04%

Hcp Inc HCP US 14 685 31.34 31.16 5.89% 38.16%

Essex Property Trust ESS US 16 854 256.92 255.62 2.60% 28.20%

Host Hotels & Resorts HST US 13 308 17.99 17.86 4.74% 30.89%

Macerich Co MAC US 8 140 57.41 57.17 4.83% 37.64%

Sl Green Realty SLG US 10 434 101.03 100.58 2.89% 41.77%

Kimco Realty KIM US 7 466 17.54 15.49 6.70% 42.40%

Digital Realty Trust DLR US 19 182 118.19 117.43 3.05% 38.76%

Federal Rlty Inv Tr Sbi FRT US 8 867 122.74 121.86 3.16% 26.11%

Extra Space Storage Inc Com EXR US 9 758 77.47 76.93 3.96% 32.36%

Udr Inc UDR US 10 324 38.61 38.40 3.13% 28.79%

Brixmor Property Group BRX US 5 500 18.04 17.86 5.60% 47.75%

Camden Property Trust CPT US 7 301 83.31 82.75 3.67% 23.50%

Alexandria Real Estate Eqty ARE US 10 626 116.68 116.14 2.84% 32.95%

Kilroy Realty Corporation KRC US 7 196 73.22 72.97 2.18% 23.35%

Regency Centers Corp. REG US 10 361 60.86 60.78 3.41% 26.95%

Developers Diversified Rlty DDR US 3 150 8.58 8.43 8.72% 54.97%

Liberty Property Trust LPT US 6 049 41.09 40.73 4.35% 34.07%

Sun Communities SUI US 6 746 86.14 85.77 3.07% 40.00%

Equity Lifestyle Properties Inc ELS US 7 330 84.40 84.02 2.12% 29.43%

Taubman Centers TCO US 3 711 61.15 60.64 4.04% 36.86%

Cubesmart CUBE US 4 497 24.96 24.82 3.93% 26.61%

American Campus Cmntys ACC US 6 363 47.46 47.35 3.65% 28.40%

Highwoods Properties HIW US 5 142 50.40 50.32 3.64% 32.01%

Lasalle Hotel Properties LHO US 3 221 28.45 28.22 6.73% 35.11%

Mid-America Apartment Comm MAA US 11 578 101.94 101.94 3.32% 28.26%

Tanger Factory Outlet Centers SKT US 2 514 26.06 25.90 4.92% 34.33%

Dct Industrial Trust DCT US 4 848 52.71 52.51 2.30% 29.71%

Diamondrock Hospitality DRH US 2 221 11.09 11.00 4.66% 34.78%

Duke Realty Corp DRE US 10 195 28.67 28.67 2.59% 23.56%

Cousins Properties CUZ US 3 586 8.56 8.50 3.23% 30.08%

Acadia Realty Trust AKR US 2 300 27.15 26.98 4.21% 28.76%

Corporate Office Properties Trust OFC US 3 354 33.73 33.53 3.36% 39.50%

Urban Edge Properties UE US 2 563 23.84 23.69 3.56% 31.88%

Empire State Realty Trust Inc ESRT US 3 285 20.80 20.72 2.02% 16.90%

Dupont Fabros Technology Inc DFT US 5 007 54.63 54.38 3.58% 32.34%

Eastgroup Properties Sbi EGP US 2 761 81.44 80.90 3.04% 33.78%

Retail Opp Invts ROIC US 2 168 19.76 19.64 3.78% 36.05%

Education Rlty Tr Inc EDR US 2 804 38.31 38.19 4.10% 18.93%

National Retail Properties NNN US 5 722 38.37 38.37 4.70% 24.48%

Realty Income O US 14 999 54.93 54.93 4.43% 27.53%

Coresite Realty COR US 5 375 105.28 104.97 2.60% 23.02%

Total Canada 23 756 4.79% 39.33%

Riocan Real Estate Investment Trust Units REI-U CN CA 6 101 25.30 25.29 5.61% 41.00%

H&R Reit HR-U CN CA 4 894 22.92 22.84 6.02% 45.00%

First Capital Realty Inc FCR CN CA 3 636 20.13 19.97 4.55% 45.00%

Canadian Real Estate Investment Trust Units

REF-U CN CA 2 657 48.96 48.94 3.71% 38.00%

Boardwalk Real Estate Investment Trust Units

BEI-U CN CA 1 796 47.95 47.92 4.42% 44.00%

Allied Properties Reit AP-U CN CA 2 399 38.25 38.24 3.97% 38.53%

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EUROPECOMPANY BLOOMBERG



CURRENCY CLEAN


ROLLED YIELD LOCAL

CURRENCY


Total Europe 187 849 3.66% 34.59%

Total United Kingdom 55 251 3.42% 28.21%

Land Securities LAND LN GB 10 906 10.70 10.61 3.61% 22.00%

British Land Company Plc BLND LN GB 8 416 6.34 6.29 4.65% 29.90%

Hammerson HMSO LN GB 5 986 5.86 5.80 4.12% 39.00%

Intu Properties Plc INTU LN GB 4 751 2.72 2.70 5.18% 45.40%

Derwent London DLN LN GB 3 972 27.66 27.62 2.20% 17.70%

Capital & Counties CAPC LN GB 3 435 3.14 3.14 0.46% 18.75%

Segro Plc SGRO LN GB 6 473 5.03 4.65 3.52% 33.00%

Great Portland Estates GPOR LN GB 2 672 6.35 6.34 1.74% 18.30%

Capital & Regional CAL LN GB 530 0.58 0.58 5.89% 44.63%

Shaftesbury SHB LN GB 3 496 9.72 9.67 1.57% 26.10%

Unite Group UTG LN GB 1 823 6.30 6.28 3.15% 34.00%

Big Yellow Group BYG LN GB 1 605 7.89 7.75 3.59% 25.91%

Safestore SAFE LN GB 1 187 4.40 4.37 2.83% 35.11%

Total Continental Europe 132 598 3.79% 37.86%

Unibail - Rodamco Sa UL NA France 25 758 229.65 227.76 4.63% 33.00%

Vonovia VNA GY Germany 18 436 34.98 34.93 3.43% 47.34%

Klepierre LI FP France 13 142 37.18 36.97 5.09% 36.80%

Deutsche Wohnen DWNI GY Germany 13 923 34.92 34.40 1.66% 32.36%

Gecina GFC FP France 9 761 136.85 135.66 3.54% 32.00%

Leg Immobilien LEG GY France 5 962 83.92 83.81 3.53% 43.74%

Psp Swiss Property PSPN SW Switzerland 4 329 91.35 90.85 3.62% 31.90%

New Europe Prop NEP SJ Romania 3 896 153.00 151.94 4.15% 34.20%

Hufvudstaden HUFVA SS Sweden 3 592 147.70 147.06 2.28% 15.00%

Castellum CAST SS Sweden 4 078 129.70 128.73 3.89% 49.12%

Deutsche Euroshop DEQ GY Germany 2 436 37.09 35.73 3.98% 34.20%

Sirius SRE LN Germany 555 56.25 55.06 4.73% 45.00%

Irish Residential Properties Reit

IRES ID Ireland 615 1.31 1.30 4.04% 32.00%

Interxion Holdings INXN Netherlands 3 157 44.45 44.45 0.00% 17.40%

Ado Properties ADJ GY Netherlands 1 898 38.28 38.25 1.03% 36.03%

Citycon Oyj CTY1S FH Finland 2 242 2.24 2.21 5.93% 46.60%

Fabege FABG SS Sweden 3 109 163.30 162.59 2.73% 43.76%

Mercialys (Reit) MERY FP France 1 803 17.42 17.33 6.13% 38.00%

Eurocommercial Properties ECMPA NA Netherlands 2 037 37.05 35.85 5.82% 41.00%

Buwog BWO AV Austria 2 833 25.25 24.77 3.15% 39.00%

Rockcastl ROC SJ Poland 2 371 32.90 32.61 4.51% 45.70%

Beni Stabili BNS IM Italy 1 553 0.61 0.61 4.18% 43.50%

Alstria Office Ag AOX GY Germany 2 142 12.43 12.40 4.08% 40.90%

Sponda SDA1V FH Finland 1 588 4.16 4.12 4.96% 48.30%

Vastned Retail VASTN NA Netherlands 755 35.25 35.03 5.68% 41.80%

Nieuwe Steen Investments NSI NA Netherlands 628 3.85 3.82 7.17% 44.09%

5

ASIACOMPANY BLOOMBERG



CURRENCY CLEAN


ROLLED YIELD LOCAL

CURRENCY


Total Asia 148 199 3.83% 31.54%

Total Australia 66 670 4.53% 31.31%

Scentre Group SCG AU AU 16 951 4.29 4.22 5.14% 33.00%

Westfield Corp WFD AU AU 13 286 8.61 8.53 2.99% 39.00%

Vicinity Centres VCX AU AU 8 177 2.78 2.70 6.16% 24.00%

Goodman Group GMG AU AU 11 379 8.56 8.46 2.99% 31.28%

GPT Group GPT AU AU 7 108 5.31 5.21 4.52% 26.28%

Dexus Property Group DXS AU AU 7 595 10.56 10.38 4.41% 27.00%

Investa Office Fund IOF AU AU 2 174 4.77 4.68 4.30% 26.50%

Total Hong Kong 45 064 3.79% 17.29%

Hong Kong Land Hld. HKL SP HK 17 787 7.56 7.52 2.44% 12.77%

Link Real Estate Investment

Trust

823 HK HK 17 523 61.70 60.74 3.74% 18.73%

Hysan Development Co. Ltd. 14 HK HK 4 890 36.45 36.12 3.82% 7.86%

Champion REIT 2778 HK HK 3 811 5.11 5.10 4.42% 20.81%

Sunlight Real Estate Invest 435 HK HK 1 052 5.00 4.94 4.71% 23.49%

Total Japan 16 731 2.91% 35.33%

Nippon Building Fund Inc 8951 JP JP 7 597 596 000 589 403 2.78% 35.63%

Japan Real Estate Investment 8952 JP JP 6 890 583 000 580 143 2.85% 32.46%

Kenedix Realty Investment Co 8972 JP JP 2 244 614 000 611 889 3.59% 43.50%

Total Singapore 18 596 5.79% 34.99%

Capitamall Trust CT SP SG 5 037 1.97 1.95 5.74% 34.80%

Ascendas Real Estate

Investment Trust

AREIT SP SG 5 463 2.62 2.61 5.98% 38.42%

Capitacommercial Trust CCT SP SG 3 611 1.68 1.64 5.52% 30.23%

Mapletree Logistics Trust MLT SP SG 2 134 1.18 1.17 6.31% 36.71%

Fortune REIT 778 HK SG 2 352 9.62 9.47 5.23% 30.65%

Total New Zealand 1 138 5.36% 31.92%

Goodman Property Trust GMT NZ NZ 1 138 1.26 1.24 5.36% 31.92%

INFORMATION SOURCE AND METHODOLOGY

Data: Bloomberg unless stated otherwise

Calculations: Catalyst Fund Managers

Clean Price: Adjusts the closing price for distribution accrued since last distribution date

Rolled yield: Time weighted current 12 month historic distribution divided by the clean price.

Debt %: These are loan to value numbers.

Date: All data taken on 1 JUNE 2017

Catalyst Fund Managers (Pty) Ltd4th Floor Protea Place, Protea Road,Claremont, 7708 Cape Town, South AfricaPO Box 44845, Claremont 7735 Cape Town, South Africa

Tel: +27 21 657 5500Fax: +27 21 683 7579

www.catalyst.co.za

An Authorised Financial Services Provider Catalyst Fund Managers (Pty) Ltd (FSP: 723)Catalyst Fund Managers SA (Pty) Ltd (FSP: 36009)Catalyst Fund Managers Global (FSP: 45418)

The information contained in this document is confidential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent of Catalyst Fund Managers. The opinions expressed are in good faith and while every care has been taken in preparing this document, Catalyst Fund Managers makes no representations and gives no warranties of whatever nature in respect of this document, including but not limited to the accuracy or completeness of any information, facts and/or opinions contained therein. Catalyst, its subsidiaries, the directors, employees and agents cannot be held liable for the use of and reliance of the opinions, estimates, forecasts and findings in this document.

Past performance is not a reliable indicator of future results, prices of investments and the income from them may fall as well as rise. Investments in equities are subject to market risk and, potentially, to exchange rate risk.This document is for information only and does not constitute advice or solicitation for funds.

IMPORTANT INFORMATION

global report may 2017 - catalyst fund managers · 1 global report may 2017 the ftse epra/nareit...

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