September, 2023
During September, the Dexus Core Property Fund (DCPF or the Fund) experienced a negative return. The negative return was driven by the listed portfolio, with unlisted portfolio relatively static for the month. The Fund’s one year return is negative, however over the 3, 5 and 10 year horizons the Fund is showing solid positive returns.
– The listed component delivered a -6.04% return (before fees) in September. Following two prior months of positive returns, September saw an unwinding of Listed Real Estate performance on the back of rising bond yields. At a sector level, the key detractor was holdings in telecommunication towers, which tend to be more sensitive to rising yields as they are a longer duration asset. We maintain our conviction in Towers due to their strong operating metrics and ability to consistently grow earnings.
– Another key detractor was the selfstorage sector. Extra Space Storage Inc was amongst this as slowing fundamentals from the elevated levels reached in the wake of the pandemic resulted in weaker performance over the quarter.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/September-performance-2023-DCPF_H-FINAL.pdfAugust, 2023
– During August, the Dexus Core Property Fund (DCPF or the Fund) experienced a solid positive return. The positive return was driven by the listed portfolio, with the unlisted portfolio relatively static for the month. The Fund’s one year return is negative, however over the 3, 5 and 10 year horizons the Fund is showing solid positive returns. During the month the Mirvac Wholesale Office Fund reported that, as part of a capital management strategy, it intended to reduce its distribution pay out ratio in the short term (next 18 months) to 40%. This change in distribution methodology will negatively impact the distributable income of DCPF over the affected period.
– The listed component delivered a +1.75% return (before fees) in August. At a country level, the main contributors were Australia, Singapore and Japan, whilst the main detractor was the US. At a sector level, the main contributors were holdings in industrial, data centres and healthcare whilst retail detracted.
– The largest contributor for the period was Goodman Group, which is one of the largest positions in the Fund. Goodman reported strong earnings for FY23, underpinned by demand for high quality industrial properties globally. Goodman also communicated that they are sitting on a material opportunity within their portfolio to convert existing facilities to data centres. This opportunity should drive significant value for Goodman and was well received by the market.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/August-performance-DCPF-Class-H.pdfJuly, 2023
– During July, the Dexus Core Property Fund (DCPF or the Fund) experienced a minor negative return. A negative valuation movement in respect of the Dexus Wholesale Shopping Centre Fund (DWSF) as at 30 June 2023 (reflected in DCPF returns for July) offset a positive return from the listed portfolio. The Fund’s one year return is negative, primarily reflecting the material valuation overlay that was applied to the Mirvac Wholesale Office Fund investment in May 2023 and negative valuation movements in DWSF. Over the 3, 5 and 10 year horizons the Fund is showing solid positive returns.
– The listed component delivered a +2.42% return (before fees) in July. At a country level, the main contributors were holdings in Australia, the US and the UK, whilst the main detractor was Hong Kong. At a sector level, the main contributors were holdings in residential rentals, industrial and data centres whilst self-storage detracted.
– During July the European market was the best performer, with the European Central Bank’s dovish tone signalling the worst of the tightening monetary conditions may be behind us. In addition, the region was bolstered as inflation in the UK showed signs of slowing.
– Self-storage was a weak performer in July as fundamentals decelerate from very elevated levels post COVID, but continue to be positive overall. Two large acquisitions by major landlords demonstrated confidence in the sector and should provide investors with comfort around the growth outlook for the sector.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/July-performance-2023-DCPF-Class-H.pdfJune, 2023
• During June, the AMP Capital Core Property Fund (CPF or the Fund) experienced a minor negative return. A negative valuation movement in respect of the Dexus Wholesale Shopping Centre Fund offset a positive return from the listed portfolio and distributions of 1.03%. The Fund’s one year return is negative, primarily reflecting the material valuation overlay that was applied to the Mirvac Wholesale Office Fund investment in May 2023. Over the 3, 5 and 10 year horizons the Fund is showing solid positive returns.
• The listed component delivered a +0.3% return (before fees) in June. At a country level, the main contributors were holdings in the US, New Zealand and Japan, whilst the main detractors were the UK, Hong Kong and Belgium. At a sector level, data centres outperformed due to a positive narrative off the back of stronger than expected results from NVIDIA, which is a major supplier to the data centre market. With the tailwinds for AI being appreciated by the market, our positions in NEXT DC, Equinix REIT Inc and Digital Realty Trust REIT Inc performed well over the period.
• During June inflation remained stickier than central banks would like, resulting in a hawkish approach globally and an increase in bond yields. As a result, the REIT sector underperformed equities that were driven by the US listed mega cap technology companies.
• Our view is that investing in real estate that has a sustainable growth profile is key. We continue to focus on real estate sectors that will benefit from structural changes in the economy, including increased digitisation.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a-9.pdfMay, 2023
• During May, the AMP Capital Core Property Fund (CPF or the Fund) experienced significant negative returns. The major contributor to the negative return was the application of a -20% valuation overlay to the Fund’s investment in the Mirvac Wholesale Office Fund (‘MWOF’). This overlay contributed c. -8% to the overall Fund return for May. The valuation overlay was applied in accordance with the Fund’s Valuation Policy and reflects trading activity in MWOF units at a material discount to the previous Net Asset Value reported by MWOF. The valuation overlay ensures the Fund’s assets are recorded at market value and that all investors are treated equally.
• The Fund’s one year return is negative, reflecting the above valuation overlay and a challenging period for the listed portfolio where returns have been -5.7%. Over the 3 year, 5 year and 10 year horizons the Fund is showing solid positive returns.
• The listed component delivered a -1.1% return (before fees) over the month. At a country level, the main contributors were holdings in Australia and Canada whilst the main detractors were the United States, United Kingdom and Hong Kong. At a sector level, the main contributors were holdings in Data Centres and Diversified.
• May was mixed for the asset class but overall, the sector was down and underperformed equities. The returns from the sector were driven in part by higher interest rates and inflation in several markets. During the month we saw M&A in the sector, building on the emerging activity we saw in April and indicating confidence in the underlying real estate markets.
• As inflation and interest rates remain elevated, we continue to focus on long term sustainable growth as economic growth concerns are a near-term risk.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-14.pdfApril, 2023
• During April, the AMP Capital Core Property Fund (CPF or the Fund) experienced slightly negative returns, with gains in the listed portfolio offset by negative valuation movements in the unlisted portfolio. Over one year the fund is in negative territory, reflecting a challenging period for the listed portfolio where returns have been -13.0%; and negative valuation movements for the unlisted portfolio since 31 December 2022. Over the longer-term horizon of 3 years plus the Fund is showing solid positive returns.
• The unlisted portfolio experienced negative returns over the month, related to valuation decrements reported as at 31 March 2023 and reflected in CPF’s April performance figures. The valuation movements primarily related to a softening of capitalisation rates in the Mirvac Wholesale Office Fund.
• The listed component delivered a 3.45% return (before fees) over the month. At a country level, the main contributors were Australia, the United States and Japan, the main detractors were holdings in Hong Kong, Sweden and Canada. At a sector level, the main contributors were holdings in Residential Rentals, Industrial and Healthcare.
• During the month the Reserve Bank of Australia (RBA) paused their hiking cycle. Whilst inflation continues to cool from its peaks, it remains well above the RBA target range and some market participants are suggesting the RBA may tighten further. In April we saw the signs of M&A activity with a merger in US self-storage and an acquisition in UK Logistics. This shows the re-emergence of private equity capital that has been side lined recently and investor demand remains robust for certain real estate sectors.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a-8.pdfJanuary, 2023
During January, AMP Capital Core Property Fund (CPF or the Fund) experienced a positive return, with gains occurring in the listed portfolio. Over one year the fund is in negative territory, reflecting a challenging period for listed portfolio where returns have been - 14.0%; however over 2 years and longer-term horizon of 5 years plus the Fund is showing strong positive returns.
The unlisted portfolio was slightly negative in the month, with negative valuation movements in MWOF as at 31 December 2022 being reflected in the January performance for CPF.
The listed component delivered a 4.7% return (before fees). At a country level, the main contributors were holdings in Australia, Europe and the US. At a sector level, the main contributors were holdings in the diversified, data centre, hotels and industrial sectors. In the current environment, dominated by talks of “soft landings” and an earlier peak in interest rates, property stocks were led by the more volatile fund managers, with positions in Goodman Group and Charter Hall benefiting from this theme.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a-7.pdfOctober, 2022
During October, AMP Capital Core Property Fund (CPF or the Fund) experienced a strong positive return, with gains in both the listed and unlisted portfolios.
The Fund is in negative territory over the past 12 months, reflecting a challenging period for listed markets; however over 2 years and longer-term horizon of 5 years plus the Fund is showing strong positive returns.
The unlisted portfolio benefited from positive valuation movements in the Mirvac Wholesale Office Fund (MWOF) 30 September valuations that were reflected in the October performance figures for CPF.
The listed component delivered a 6.03% return (before fees), reflecting a rally in listed markets during the October. The rally was assisted by a softening of central back interest rate stance (Australia), continued strong earning fundamentals in the US and stabilisation of Government and budget concerns in the UK.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-13.pdfAugust, 2022
During August, the Fund experienced negative returns, driven by losses in the listed sector as the global market priced in a higher risk of elevated interest rates and associated negative economic impacts. The Fund is slightly negative over the past 12 months in what has been a challenging period for the listed sector, however, is showing strong returns over 2 years.
The AMP Capital Wholesale Office Fund (AWOF) gained 0.60% during the month on a total return basis (before fees). The performance of AWOF from an income perspective was consistent with previous months and with an increasing number of tenants occupying the recently completed Quay Quarter Tower (Sydney). There was a positive capital return of $9.7m associated with revaluation of the South Eveleigh, Sydney asset in which the fund has a 33% share.
The AMP Capital Shopping Centre Fund (ASCF) gained 0.11% during the month on a total return basis (before fees). The performance of ASCF was driven by strong income returns with rental receipts at high levels. Valuations during the month were generally flat, apart from Rockingham that experienced a negative movement due to a softening on the capitalisation rate.
noThe listed real estate component returned -4.07% (before fees) in challenging market conditions. At a country level, the main detractors were holdings in the United States and Australia. At a sector level, the main detractors were holdings in the industrial and specialised REITs. Markets began the month focused on earnings commentary, which was generally better than expected across most segments. The industrial sector continued to deliver strong fundamental results, with Goodman Group announcing a 25% increase in operating profit, however the sector has been particularly impacted by comments from the Federal Reserve during the month indicating that it is willing to risk economic pain in pursuit of controlling inflation. At a stock level, the largest contributors were holdings in Charter Hall Group (diversified), Lifestyle Communities (manufacturing homes) and Extra Space Storage (self-storage), while the largest detractors were holdings in Arena REIT (Childcare), Goodman Group (Industrial) and Prologis (Industrial).
Note: A small cash holding remains in the AMP Capital U.S. Plus Property Fund, which has been terminated. The cash will be held until the expiry of representation and warranty periods, expected to occur during the second half of 2022.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-12.pdfJuly, 2022
During July, the Fund performed very strongly, driven by a recovery in the listed sector. The Fund is in positive territory over the past 12 months in what has been a challenging period, particularly for the listed portfolio and is showing strong returns over 2 years.
The AMP Capital Wholesale Office Fund (AWOF) gained 0.14% during the month on a total return basis (before fees). The performance of AWOF from an income perspective was consistent with previous months and with an increasing number of tenants occupying the recently completed Quay Quarter Tower (Sydney) over the next year we expect the income return to strengthen. There was a slight negative capital return associated with mark to market of interest rate swaps and an accounting revaluation of Quay Quarter Tower where part of the sale proceeds to Rest was redistributed. No real estate valuations were undertaken in the month.
The AMP Capital Shopping Centre Fund (ASCF) gained 0.34% during the month on a total return basis (before fees). The performance of ASCF was driven by strong income returns with rental receipts at high levels. ASCF is reporting very strong foot traffic at the Indooroopilly Shopping Centre within the new Automall and Goodlife Gym precincts since their opening in May (traffic up 38% compared to 2021). No real estate valuations were undertaken in the month.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a-6.pdfJune, 2022
During June, the Fund lost some ground, but it remains up over the longer term, including over 1, 2 and 3 years and since inception (after fees). Performance of the three underlying components was mixed.
The AMP Capital Wholesale Office Fund (AWOF) gained 1.61% during the month on a total return basis (before fees). The performance of AWOF was enhanced by valuation uplifts for Collins Place (Melbourne), Brookfield Place (Sydney) and Quay Quarter Tower (Sydney). There was limited compression in capitalisation and discount rates in recent valuations and most of the valuation uplift was related to market rental growth, reflecting tenant preference for high quality assets.
The AMP Capital Shopping Centre Fund (ASCF) gained 0.96% during the month on a total return basis (before fees). The performance of ASCF was driven by solid income returns as tenant trading conditions continued to improve resulting in higher rental receipts and reduction in arrears. Valuations were flat in June, with the standout being an increase in value for Westfield Tea Tree (Adelaide) due to additional income from reconfiguration of the Target tenancy
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-11.pdfMay, 2022
The Fund posted a negative return in May, dragged down by the performance of the listed real estate component. However, the Fund remains up strongly over the longer term, including over 1, 2 and 3 years and since inception (after fees). The AMP Capital Wholesale Office Fund (AWOF) gained 1.85% and the AMP Capital Shopping Centre Fund (ASCF) gained 0.62% on a total return basis (before fees). The strong performance of AWOF was mainly due to valuation uplifts at South Eveleigh and Quay Quarter Tower, as well as capital gains from the sale of a 16.7% stake in Quay Quarter Tower to REST Super. The healthy performance of ASCF was driven by strong income return across the portfolio, and valuation uplifts at Royal Randwick, Westfield Southland and Ocean Keys Shopping Centre.
The listed real estate component, which is a bespoke portfolio managed on a benchmark-unaware basis, returned -8.68% (in A$ terms, before fees) in very difficult market conditions. At a country level, the main detractors were holdings in Australia and the US. At a sector level, the main detractors were holdings in the industrial and diversified sectors.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a-5.pdfApril, 2022
In April, the Fund made a modest gain and remains up strongly over the longer term, including over 1, 2 and 3 years and since inception (after fees). Performance of the three underlying components was mixed. The AMP Capital Wholesale Office Fund (AWOF) gained 0.39% and the AMP Capital Shopping Centre Fund (ASCF) gained 0.36% on a total return basis (before fees). The performance of AWOF was due to an uptick in income return due to completion of the Quay Quarter Tower project as well as consistent leasing activity across the portfolio. The performance of ASCF was driven by strong income return across the portfolio, with no external valuations taking place during the period.
The listed real estate component, which is a bespoke portfolio managed on a benchmark-unaware basis, returned -1.34% (in A$ terms) in difficult market conditions. At a country level, the main contributors were holdings in Australia and Japan. At a sector level, the main contributors were holdings in the healthcare, hotels and retail sectors.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a-4.pdfFebruary, 2022
In February the Fund lost some more ground, but it remains up strongly over the longer term, including over 1, 2, and 3 years and since inception (after fees). The performance of the three underlying components was mixed. The AMP Capital Wholesale Office Fund (AWOF) gained 0.93% and the AMP Capital Shopping Centre Fund (ASCF) gained 0.31% on a total return basis (before fees) – reflecting the portfolios’ robust income, which continued to be underpinned by high occupancy. AWOF also achieved an uplift from a positive revaluation at South Eveleigh, while ASCF was contained by a small number of negative valuation movements.
The listed real estate component, which is a bespoke portfolio managed on a benchmark-unaware basis, returned -2.86% (in A$ terms) in difficult market conditions. At a country level, the main detractors from performance were holdings in the US and Belgium, while the main contributors were holdings in Australia. At a sector level, the main detractors were holdings in the industrial and residential rentals sectors, while the main contributors were holdings in the retail and hotels sectors.
While the industrial segment underperformed during the period, fundamentally it went from strength to strength as demand for industrial space continued to grow. In Australia, Goodman Group once again ‘shot the lights out’, with earnings per share increasing 26% compared to the same period last year. It demonstrated strength in its development, management, and investment divisions, and significantly increased it earning per share guidance for fullyear 2022.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-10.pdfJanuary, 2022
In January the Fund lost most of the gains made in December (after fees), but it remains up over the past three months, and is up strongly over the year. Performance of the three underlying components was mixed. The AMP Capital Wholesale Office Fund (AWOF) gained 0.31% on a total return basis (before fees) – reflecting the portfolio’s income, which continued to be underpinned by high occupancy. The AMP Capital Shopping Centre Fund (ASCF) declined marginally, returning -0.07%, due to transaction costs related to the acquisition of an additional 25% ownership stake in Macquarie Shopping Centre, NSW. This takes ASCF’s ownership of the asset to 50% and ties in perfectly with its 2021 strategy to invest in dominant properties with limited competition and future supply outlook, while also considering their mixed-use potential to fortify ASCF’s income proposition.
The listed real estate component, which is a bespoke portfolio managed on a benchmark-unaware basis, lost most of the gains made last quarter, returning -8.52% (in A$ terms) in difficult market conditions. At a country level, the main detractors from performance were holdings in Australia and the US, while the main contributors were holdings in Hong Kong. At a sector level, the main detractors were holdings in the industrial, diversified and residential rentals sectors, while the only contributors were holdings in the residential sales sector
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-9.pdfDecember, 2021
The Fund posted a strong positive return (after fees) over the quarter, with all three of its underlying components gaining ground, led by the listed real estate component which ‘shot the lights out’. The AMP Capital Shopping Centre Fund (ASCF) gained 3.45% and the AMP Capital Wholesale Office Fund (AWOF) gained 3.22% on a total return basis (before fees) – reflecting each portfolio’s income, which continued to be underpinned by high occupancy. AWOF’s uplift was also driven by revaluations of Quay Quarter Tower and 255 George Street, NSW.
During the period, the results of the Global Real Estate Sustainability Benchmark (GRESB) assessment were released. AWOF scored 93% and ASCF scored 90%, which were above their respective peer group averages and significant improvements on their 2020 results. In addition, both funds maintained their 5-star ratings, placing them in the top 20% of the global benchmark. ASCF settled the divestment of its 24.94% stake in Westfield Warringah Mall, NSW for $410 million. While the sale was not originally part of the Fund’s 2021 strategy, it delivered a circa 12% premium to book value. The Fund also settled the divestment of its 50% stake in Stockland Kmart Centre, QLD for $23.6 million, delivering a circa 30% premium to book value. It also progressed the divestment or several non-core assets, which will improve the quality of the Fund’s existing portfolio
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a-3.pdfNovember, 2021
The Fund posted a healthy positive return (after fees) in November, with all three of its underlying components gaining ground, led by the listed real estate component, which continued to perform strongly.
The AMP Capital Shopping Centre Fund (ASCF) gained 2.22% and the AMP Capital Wholesale Office Fund (AWOF) gained 0.41% on a total return basis (before fees) – reflecting each portfolio’s income, which continued to be underpinned by high occupancy. During the period, ASCF exchanged contracts on the sale of The Palms Shopping Centre, New Zealand for a 2% premium, and commenced an on-market campaign to sell its 50% interest in Stockland Townsville, Queensland. The sale of these smaller, noncore assets is the implementation of ASCF’s strategy to recycle capital into high-quality retail assets and bolster its balance sheet. It also exchanged contracts to sell its 25% share in Warringah Mall, NSW for $410 million, delivering a 12% premium to the September book value.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-8.pdfOctober, 2021
The Fund posted a positive return (after fees) during October with all three of the Fund’s underlying components gaining ground, led by the Fund’s listed component which continued to perform strongly. During the period, positive performance of the AMP Capital Wholesale Office Fund (+0.48%) and the AMP Capital Shopping Centre Fund (+0.34%) - on a total return basis (before fees) – reflected each portfolio’s income which continues to be underpinned by high levels of occupancy.
The Global Real Estate Sustainability Benchmark (GRESB) results were released on 1 October 2021, with 1,520 property companies, real estate investment trusts, funds and developers having participated in the assessment. The AMP Capital Wholesale Office Fund scored 93%, which was above the peer group average of 88% and representing a 4% improvement from 2020. The AMP Capital Shopping Centre Fund scored 90% (above the peer group average of 86% and a 6% improvement from 2020). Both funds maintained a 5-star rating, placing them in the top 20% of the global benchmark
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-7.pdfSeptember, 2021
The Fund posted a positive return (after fees) during the September quarter with all three of the Fund’s underlying components gaining ground, led by the Fund’s listed component which continued to perform strongly.
During the period, positive performance of the AMP Capital Wholesale Office Fund (+1.80%) and the AMP Capital Shopping Centre Fund (+0.64%) - on a total return basis (before fees) – reflected each portfolio’s income which continues to be underpinned by high levels of occupancy. Revaluations of retail assets were largely positive, with Royal Randwick, Sydney and Indooroopilly Shopping Centre, Brisbane recording uplifts. These were somewhat offset by the devaluations of Westfield Liverpool, Sydney and The Palms in New Zealand, which softened slightly.
The office fund’s performance was bolstered by the firming of valuations on a number of assets and the sale of 200 George Street, Sydney, with strong interest for this high quality, well-let asset seeing Mirvac, who own the balance of the asset, acquiring the site for a sale price which represented a 12% premium to the 31 March 2021 book value.
Proceeds from the sale of the two remaining assets in the AMP Capital US Plus Property Fund (Hedged) were reinvested during the period, in accordance with the AMP Capital Core Property Fund’s investment strategy
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-6.pdfAugust, 2021
The Fund posted a positive return (after fees) during August with all three of the Fund’s underlying components gaining ground, led by the Fund’s listed component which continued to perform strongly. During the period, positive performance of the AMP Capital Wholesale Office Fund (+0.36%) and the AMP Capital Shopping Centre Fund (+0.07%) - on a total return basis (before fees) – reflecting each portfolio’s income which continues to be underpinned by high levels of occupancy. Proceeds from the sale of the two remaining assets in the AMP Capital US Plus Property Fund (Hedged) were reinvested during the period, in accordance with the investment strategy of the AMP Capital Core Property Fund, rebalancing the Fund in line with targeted asset allocations.
A formal process is currently underway, where the Trustee, in conjunction with an Independent Advisory Committee and consultants, is giving consideration to expressions of interest for the management of the AMP Capital Wholesale Office Fund. The Trustee is committed to concluding this process as quickly as possible, whilst exploring credible options appropriately, with the outcome to be communicated to investors when the process is completed.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-5.pdfJuly, 2021
The Fund posted a positive return (after fees) during July with all three of the Fund’s underlying components gaining ground, led by the Fund’s listed component which performed strongly. During the period, positive performance of the AMP Capital Wholesale Office Fund (+0.67%) and the AMP Capital Shopping Centre Fund (+0.25%) - on a total return basis (before fees) – reflecting each portfolio’s income which continues to be underpinned by high levels of occupancy.
The AMP Capital Wholesale Office Fund successfully divested its 50% interest in 200 George Street, Sydney. The on-market campaign elicited strong interest for this high quality, well-let asset, resulting in a competitive bidding process. Ultimately Mirvac, who own the balance of the asset, elected to exercise their pre-emptive right to acquire the site for a sale price of $578.5 million (50% interest), representing a 12% premium to the 31 March 2021 book value.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-4.pdfMay, 2021
The Fund posted a positive return (after fees) during May with all four of the Fund’s underlying components gaining ground, led by the Fund’s listed component.
The listed component of the Fund, which is a bespoke portfolio managed on a benchmark-unaware basis, continued to provide positive returns post the COVID-19 drawdown of 2020, rising by 2.10% (in A$ terms) during the period. At a country level, holdings in Australia and the US contributed most, whereas holdings in China and Hong Kong detracted slightly overall. At a sector level, all sector exposures contributed with the exception of hotels, with holdings in the residential, office and retail sectors the best performers.
At a stock level, the largest contributors to performance were holdings in Ingenia Communities Group (residential), HomeCo Daily Needs REIT (retail) and Lifestyle Communities (residential), while the main detractors were GDS Holdings (specialised), Home Consortium (diversified) and SF Real Estate Investment Trust (industrial).
The office segment is gaining momentum as the return to office working progresses with the roll out of vaccines. In the US, Boston Properties built on the momentum from its solid Q1 2021 results reported in April. It inked a 12-year lease with one of the largest management consulting firms in the world, Boston Consulting Group, for space at Metropolitan Square in Washington, DC. The company is also set to benefit from the New York City Mayor’s plans to ‘fully reopen’ the city at the beginning of July.
During the period, positive performance of the AMP Capital Wholesale Office Fund (+0.59%) and the AMP Capital Shopping Centre Fund (+0.28%) - on a total return basis (before fees) - was underpinned by continued high levels of occupancy (96% for the shopping centre fund and 93% for the office fund). Robust levels of consumer sentiment supported by ongoing government stimulus measures and the wealth effect of a booming residential sector, as well as strong business confidence in Australia bodes well for continued performance in each of these sectors.
In terms of valuations, South Eveleigh recorded an uplift in value during the month due to a sharpening of the discount rate by 25 basis points. Shopping centre valuations were mixed, resulting in a very slight fall in portfolio book value of -0.1%.
AMP Capital US Plus Property Fund (Hedged) rose by 0.48% on a total return basis (before fees and taxes) over the period, led by continued revaluation growth. AMP Capital Funds Management Limited, the Responsible Entity of the AMP Capital US Plus Property Fund, made the decision to terminate this Fund in March 2019. As a result, the Manager is proceeding to divest the Fund’s underlying assets and distribute the proceeds to unitholders, including to the AMP Capital Core Property Fund.
The sale of the two remaining properties is likely to be concluded in coming weeks, following the divestment of the balance of the portfolio in 2019. AMP Capital will reinvest these proceeds in accordance with the investment strategy of the AMP Capital Core Property Fund.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a.pdfMarch, 2021
The Fund posted a positive return (after fees) during the March quarter with all four of the Fund’s underlying components gaining ground, led by the Fund’s listed component. The listed component of the Fund, which is a bespoke portfolio managed on a benchmark-unaware basis, continued to provide positive returns post the COVID-19 drawdown of 2020, rising by 3.23% (A$ terms). At a country level, holdings in the US, Japan and Australia US contributed most during the period, whereas holdings in New Zealand and Germany detracted most overall. At a sector level, retail and residential holdings were the best performers, while diversified and industrial were the main detractors from returns. At a stock level, the largest contributors to performance were holdings in Welltower (healthcare), Simon Property Group (retail) and Weingarten Realty Investors (retail), while the main detractors were Charter Hall Group (diversified), Goodman Group (industrial) and Goodman Property Trust (industrial).
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-3.pdfFebruary, 2021
The Fund posted a positive return (after fees) during February. The Fund’s bespoke listed real estate portfolio and two of the Fund’s three underlying unlisted property components gained ground, led by the AMP Capital Wholesale Office Fund. The listed component of the Fund, which is a bespoke portfolio managed on a benchmark-unaware basis, rose modestly by 0.05% (A$ terms). At a country level, holdings in the US, Hong Kong and the UK contributed most during the month, whereas holdings in Australia detracted most. By sector, retail was the best performer, while diversified was the largest detractor. At a stock level, the largest contributors to performance were holdings in Welltower (healthcare), Lifestyle Communities (residential) and VICI Properties (specialised), while the main detractors were Charter Hall Group (diversified), Goodman Group (industrial), and Stockland (diversified). The senior housing segment, which was the most physically impacted by the pandemic, is expected to benefit from residents receiving their first vaccine shot. In the US, the improved safety of residents has allowed social activities to resume and increased the attractiveness of this type of accommodation. Welltower, which holds around 60% of its portfolio in senior housing, reported mixed Q4 2020 results but better than expected forward earnings guidance. During the period, the AMP Capital Wholesale Office Fund (+0.64%) rose whereas the AMP Capital Shopping Centre Fund (- 0.32%) fell on a total return basis (before fees). Whilst both portfolios of assets generally held their value during the period, Westfield Southland was revalued downwards slightly to reflect impacts to income in response to further lockdowns in Victoria. This was partially offset by an upward valuation for Royal Randwick, NSW. AMP Capital US Plus Property Fund (Hedged) rose by 032% on a total return basis (before fees and taxes) over the period. AMP Capital Funds Management Limited, the Responsible Entity of the AMP Capital US Plus Property Fund, made the decision to terminate this Fund in March 2019. As a result, the Manager is proceeding to divest the Fund’s underlying assets and distribute the proceeds to unitholders, including to the AMP Capital Core Property Fund. Two remaining properties are being marketed for sale,
following the sale of the balance of the portfolio in 2019. AMP Capital will reinvest these proceeds in accordance with the investment strategy of the AMP Capital Core Property Fund.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-2.pdfJanuary, 2021
The Fund posted a positive return (after fees) during January.
The Fund’s three underlying unlisted property components gained ground, led by the AMP Capital US Plus Property Fund (Hedged), whilst the bespoke listed real estate portfolio retreated somewhat. The listed component of the Fund, which is a bespoke portfolio managed on a benchmark-unaware basis, gave up some ground to fall by 1.36% (A$ terms) after a period of posting strong positive returns post the COVID-19 drawdown earlier last year. At a country level, holdings in China and France contributed most during the month, whereas holdings in Australia detracted most. By sector, specialised was the best performer, while industrial was the largest detractor.
At a stock level, the largest contributors to performance were holdings in Stockland (diversified), Ingenia Communities Group (residential) and Simon Property Group (retail), while the main detractors were Charter Hall Group (diversified), Goodman Group (industrial), and Welltower (healthcare).
The industrial segment continues to thrive as demand for online services increases. Stockland is taking advantage of industrial strength by entering into a partnership with JP Morgan Asset Management late last year to establish and manage a portfolio of industrial and logistics assets with a target value of A$1 billion. The portfolio will be seeded with two properties Stockland recently agreed to acquire, as well as several other assets from its existing holdings.
During the period, the AMP Capital Wholesale Office Fund (+0.31%) and the AMP Capital Shopping Centre Fund (+0.30%) rose on a total return basis (before fees), with both portfolios of assets generally holding their value during the period. AMP Capital US Plus Property Fund (Hedged) rose by 044% on a total return basis (before fees and taxes) over the period. AMP Capital Funds Management Limited, the Responsible Entity of the AMP Capital US Plus Property Fund, made the decision to terminate this Fund in March 2019. As a result, the Manager is proceeding to divest the Fund’s underlying assets and distribute the proceeds to unitholders, including to the AMP Capital Core Property Fund. Two remaining properties are being marketed for sale, following the sale of the balance of the portfolio in 2019. AMP Capital will reinvest these proceeds in accordance with the investment strategy of the AMP Capital Core Property Fund
However, retail is expected to remain challenged, especially those stores in peripheral locations with commoditised market propositions. Growth in online shopping, connectivity and data usage are likely to provide opportunities in logistics and data centres through the business cycle. Historically, core real estate has delivered total returns between 7-9% p.a over the market cycle1
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_h-1.pdfDecember, 2020
The Fund posted a positive return (after fees) during the December quarter with all four of the Fund’s underlying components gaining ground, led by the AMP Capital US Plus Property Fund.
The listed component of the Fund, which is a bespoke portfolio managed on a benchmark-unaware basis, continued to provide strong positive returns post the COVID-19 drawdown earlier in the year, rising by 3.42% (A$ terms). At a country level, holdings in Australia and the US contributed most during the period, whereas holdings in Belgium detracted most overall. At a sector level, residential holdings were the best performers, while specialised contributed the least to returns (albeit it was mildly positive overall). At a stock level, the largest contributors to performance were holdings in Charter Hall Group (diversified), Ryman Hospitality Properties (hotels) and Lifestyle Communities (residential), while the main detractors were Charter Hall Long WALE (net lease), Warehouses De Pauw (industrial) and Digital Realty Trust (specialised).
In the specialised segment, US-based Alexandria Real Estate Equities has demonstrated its resilience since the COVID-19 pandemic commenced, as the company continues to benefit from its high exposure to life-sciences office space. The company rallied towards the end of the period after declaring a strong increase in its dividend per share over the year. This followed its Investor Day update, where it provided full-year 2021 earnings guidance and reported solid prices for its asset sales, attractive development returns and strong demand for new space.
During the period, the AMP Capital Wholesale Office Fund (+3.55%) rose on a total return basis (before fees) and the AMP Capital Shopping Centre Fund (+2.25%) rose on a total return basis (before fees), with strong growth in valuations for the office fund and stabilised valuations for the retail fund with the majority of assets in that fund holding their value during the period. Independent valuations of the unlisted assets in these unlisted funds have reverted back to a quarterly valuation cycle, following monthly valuations being undertaken from 1 April to 1 September 2020 to reflect the impact of COVID-19 on these assets.
Performance for the AMP Capital Shopping Centre Fund was also enhanced by an improved distribution for December when compared to earlier quarters in the year, when distributions were lower to account for COVID-19 impacts.
Continued leasing success was achieved for Quay Quarter Tower (held in the AMP Capital Wholesale Office Fund) during the quarter with a binding Agreement for Lease signed with Corrs Chambers Westgarth for 10,000 square metres, a deal accretive to both the asset’s feasibility and valuation.
AMP Capital US Plus Property Fund (Hedged) rose by 5.50% on a total return basis (before fees and taxes) over the period, led by strong revaluation growth. AMP Capital Funds Management Limited, the Responsible Entity of the AMP Capital US Plus Property Fund, made the decision to terminate this Fund in March 2019.
As a result, the Manager is proceeding to divest the Fund’s underlying assets and distribute the proceeds to unitholders, including to the AMP Capital Core Property Fund. Two remaining properties are being marketed for sale, following the sale of the balance of the portfolio in 2019. AMP Capital will reinvest these proceeds in accordance with the investment strategy of the AMP Capital Core Property Fund.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a-2.pdfNovember, 2020
The Fund posted a positive return (after fees) during November.
The Fund’s bespoke listed real estate portfolio led the way, with the three underlying unlisted property components also gaining ground. The listed component of the Fund, which is a bespoke portfolio managed on a benchmark-unaware basis, rebounded to rise by 3.58% (A$ terms).
At a country level, holdings in the US and Australia contributed most during the month, whereas holdings in New Zealand detracted most. All sectors were positive overall, with diversified and residential holdings among the best performers, while office was the least positive.
At a stock level, the largest contributors to performance were holdings in Charter Hall Group (diversified), Ryman Hospitality Properties (hotels) and Welltower (healthcare), while the main detractors were Goodman Property Trust (industrial), Digital Realty Trust (specialised) and Unite Group (residential).
The hotel and lodging segment gained as it is expected to benefit over the near term from pent-up demand for leisure travel, although business-transient travel is not expected to start recovering until mid-2021 and group travel until late-2021. In the US, Ryman Hospitality Properties reported solid Q3 2020 results, with funds from operations and revenue exceeding expectations. Its monthly cash burn declined as its hotels reopened and it maintained focus on cost management.
During the period, the AMP Capital Wholesale Office Fund (+0.73%) rose on a total return basis (before fees) and the AMP Capital Shopping Centre Fund (+0.91%) rose on a total return basis (before fees), with both portfolios of assets generally holding their value during the period.
AMP Capital US Plus Property Fund (Hedged) rose by 0.51% on a total return basis (before fees and taxes) over the period. AMP Capital Funds Management Limited, the Responsible Entity of the AMP Capital US Plus Property Fund, made the decision to terminate this Fund in March 2019.
As a result, the Manager is proceeding to divest the Fund’s underlying assets and distribute the proceeds to unitholders, including to the AMP Capital Core Property Fund. Two remaining properties are being marketed for sale, following the sale of the balance of the portfolio in 2019. AMP Capital will reinvest these proceeds in accordance with the investment strategy of the AMP Capital Core Property Fund. .
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/ffs-wcpf_a-1.pdfOctober, 2020
Fund Performance
The Fund posted a marginally negative return (after fees) during October. The Fund’s three underlying unlisted property components delivered positive returns, while the bespoke listed real estate portfolio slightly lost ground.
The listed component of the Fund, which is a bespoke portfolio managed on a benchmark-unaware basis, took a breather to fall slightly by -0.25% (A$ terms), after a period of posting strong positive returns post the COVID-19 drawdown earlier in the year. At a country level, holdings in New Zealand contributed most during the month, whereas holdings in the US detracted most. At a sector level, retail and self storage holdings were among the best performers, while net lease detracted most overall.
At a stock level, the largest contributors to performance were holdings in Goodman Property Trust (industrial), Goodman Group (industrial) and Shopping Centres Australasia Property Group (retail), while the main detractors were Charter Hall Long WALE REIT (net lease), Warehouses De Pauw (industrial) and Spirit Realty Capital (net lease).
The net lease segment continued to benefit from small businesses remaining open and paying rent. Agree Realty Corp reported very strong Q3 2020 results, with rent collection rates approaching 100% and outpacing its peers. The strong results were attributed to its high-credit tenants, but also its shift away from ‘experiential’ tenants such as fitness centres, movie theatres and entertainment, which were hit hard by the pandemic.
During the period, the AMP Capital Wholesale Office Fund (+0.30%) rose on a total return basis (before fees) and the AMP Capital Shopping Centre Fund (+0.59%) rose on a total return basis (before fees), with both portfolios of assets generally holding their value during the period.
Independent valuations of the unlisted assets have reverted back to a quarterly valuation cycle, following monthly valuations being undertaken from 1 April to 1 September 2020 to reflect the impact of COVID-19 on these assets. AMP Capital US Plus Property Fund (Hedged) rose by 0.53% on a total return basis (before fees and taxes) over the period. AMP Capital Funds Management Limited, the Responsible Entity of the AMP Capital US Plus Property Fund, made the decision to terminate this Fund in March 2019. As a result, the Manager is proceeding to divest the Fund’s underlying assets and distribute the proceeds to unitholders, including to the AMP Capital Core Property Fund. Two remaining properties are being marketed for sale, following the sale of the balance of the portfolio in 2019. AMP Capital will reinvest these proceeds in accordance with the investment strategy of the AMP Capital Core Property Fund.
File: https://commentary.quantreports.net/wp-content/uploads/2020/10/capital-core-property-fund-.pdfAugust, 2020
Fund Performance
The Fund posted a positive return (after fees) in August. Three of the Fund’s four underlying components delivered positive returns, led by the bespoke listed real estate portfolio. The listed component of the Fund, which is a bespoke portfolio managed on a benchmark-unaware basis, continued to regain some of the ground lost earlier in the year to rise by 2.64% (A$ terms). At a country level, holdings in Australia contributed most during the period, whereas holdings in Singapore, Japan and Norway detracted. All sectors contributed overall, led by diversified, net lease and industrial holdings. At a stock level, the largest contributors to performance were holdings in Charter Hall Group (diversified), Goodman Group (industrial) and Charter Hall Long WALE (net lease), while the main detractors were Prologis (industrial), American Tower Corp (specialised) and Mitsubishi Estate Logistics REIT (industrial). The industrial segment continues to benefit from the accelerating trend towards online shopping. In Australia, Goodman Group announced strong full-year results, with operating profit up compared to last year, earnings per share up, and continued high occupancy. The company also provided strong earnings guidance. Charter Hall Group has actively pivoted towards industrial assets and also reported very strong full-year results. Its operating earnings rose significantly compared to last year and its distributions per share also rose. The company reported growth in its property investment portfolio, funds management, development activity and pipeline, and maintained a strong balance sheet. During the period, the AMP Capital Wholesale Office Fund (+0.24%) rose slightly on a total return basis (before fees), with its portfolio of assets generally holding their value. AMP Capital Shopping Centre Fund (-0.17%) fell slightly on a total return basis (before fees), as its portfolio of assets experienced a modest fall in market valuations during the period. From 1 April onwards, both of these unlisted funds increased the frequency of the valuation of their underlying assets from quarterly to monthly to reflect COVID-19 impacts. AMP Capital US Plus Property Fund (Hedged) rose by 0.38% on a total return basis (before fees and taxes) over the period. AMP Capital Funds Management Limited, the Responsible Entity of the AMP Capital US Plus Property Fund, made the decision to terminate this Fund in March 2019. As a result, the Manager is proceeding to divest the Fund’s underlying assets and distribute the proceeds to unitholders, including to the AMP Capital Core Property Fund. Two remaining properties are being marketed for sale, following the sale of the balance of the portfolio in 2019. AMP Capital will reinvest these proceeds in accordance with the investment strategy of the AMP Capital Core Property Fund.
ticker: AMP1015AU
commentary_block: Array
factsheet_url:
Under “performance and activity”
https://www.ampcapital.com/au/en/investments/funds/real-estate/amp-capital-core-property-fund
release_schedule: Monthly
fund_features:
AMP Capital Core Property Fund is designed to deliver income and capital growth whilst mitigating risk through the diversification of different types of real estate investments.
- The Fund has target allocations of 50% to Australasian and US unlisted real estate and 50% to Australasian and global listed real estate.
- It invests in Australian and global direct property (either held directly by the Fund or accessed indirectly through the Fund’s investment in underlying direct property funds) and Australian and global listed property securities (accessed through underlying funds).
manager_contact_details: Array
asset_class: Property and Infrastructure
asset_category: Unlisted and Direct Property
peer_benchmark: Property - Unlisted and Direct Property Index
broad_market_index: Dvlp Global Real Estate
structure: Managed Fund