August, 2023
August NAV per share increased by 0.8%
In August, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 0.8% forthe partially hedged share class. Respectively, the NAV forthe unhedged share class increased by 3.1%.
Partners Group received proceeds from the sale of Tokyo Office Asset (Tama Centre), a 34'000sqm grade A office building located in Tama New Town, about 25km from central Tokyo, Japan. The asset was sold in line with underwritten expectations. Constructed in 2002 and acquired in 2020 by Partners Group. The eight-story property is fully leased to a blue-chip Japanese company at the time of sale. The asset was sold to a Japanese institutional investor. Over the holding period, value creation initiatives that were executed include obtaining a Superior CASBEE ESG rating, improving tenant office spaces, completing common area upgrades and execution of lease renewals.
Partners Group acquired Northern Italian Last Mile Logistics Portfolio, consisting of five last mile and big-box logistics development projects in Northern Italy. The development plots are located across the Veneto supplychain corridor that connects Italy, France, Portugal, and Spain to key manufactory and logistics hubs situated in the Central and Eastern Europe and the Baltics. Partners Group acquired the investment through a joint venture with the Veneto-based developer and Italy-focused operator of the investment. The business plan involves a 10-month capital expenditure program, implementing sustainability initiatives, and leasing up to achieve about 95% stabilized occupancy
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In July, the NAV per share of the Partners Group Global Real Estate Fund (AUD) decreased by 0.1% forthe partially hedged share class. Respectively, the NAV forthe unhedged share class decreased by 0.8%.
July NAV per share decreased by 0.1% In July, Partners Group invested in Phoenix Industrial Portfolio (The Base) to fund the development of a 2.0 million sqft industrial project in the West Valley submarket of Phoenix, Arizona. The industrial project will be developed in two phases, and it is anticipated that it will take 15 months to complete Phase I. Acquired in October 2022, Phoenix Industrial Portfolio (The Base) will comprise 15 class A buildings ranging from approximately 40'000- 310'000sqft in size and will target general industrial, manufacturing, and light assembly tenants.
Over the period, Paris Office Asset (Colombes) secured a new lease with the French national employment agency to occupy two floors in building A. The 6'116 sqm lease has a term of approximately 10 years, with a rental rate in line with the latest underwriting. The transaction is the largest in the Colombes submarket to date. Following this lease, building A's occupancy rate increased to more than 80% from about 40% as of July 2023. Acquired in 2020, Paris Office Asset (Colombes) is a 26'946 sqm office asset which consists of two separate buildings located in the Colombes submarket in northwest Paris, France.
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In June, the NAV per share of the Partners Group Global Real Estate Fund (AUD) decreased by 2.0% forthe partially hedged share class. Respectively, the NAV forthe unhedged share class decreased by 3.4%.
June NAV per share decreased by 2.0% In June, Partners Group invested capital in Columbus and Orlando Industrial Portfolio to fund the ongoing development of a state-of-the-art ~440'000sqft warehouse facility in Orlando, Florida. Construction of the asset began in May 2023 and is expected to be completed around April 2024. Columbus and Orlando Industrial Portfolio was acquired in August 2022 and also includes a 1.3 million sqft bulk distribution center development project in Columbus, Ohio, which is more than 50% completed in May and expected substantial completion by end of 2023.
Over the period, French Mountain Residences (Lachat) was revalued upward due to the positive financial performance of the premium residences located in high-end ski resorts in the French Alps. As of 31 March 2023, French Mountain Residences (Lachat) reached above-budget turnover during the winter season while bookings for the summer season are expected to increase by 17% compared to last year. French Mountain Residences (Lachat) comprises 35 4-star residences with a total of ~2'400 self-catered apartments.
For further information, please enjoy ourlatest Partners Group Global Real Estate Fund (AUD) product video with Max Ilmoni, Managing Director, Private Real Estate, in the link or via the below QR code.
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In May, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 0.1% forthe partially hedged share class. Respectively, the NAV forthe unhedged share class increased by 1.4%. The main performance driver was currency movements. Since the lastreport, there has been two noteworthy event for US Single Family Rental Portfolio (Kairos) and China Luxury Outlet Malls (Silkroad II).
In May, Partners Group invested additional capital in US Single Family Rental Portfolio (Kairos) to finance the acquisition of additional homes. During H1 2023, approximately 250 homes have been acquired, in line with the value creation strategy of acquiring and developing single family rental properties across the Sunbelt region. As of 31 May 2023, US Single Family Rental Portfolio (Kairos) comprises of homes located regions observing in-migration trends and supply/demand imbalances with increasing unaffordability homeownership, with the majority of the homes located in Texas, Alabama, Georgia, Florida, and Oklahoma.
Furthermore, Partners Group received proceeds from China Luxury Outlet Malls (Silkroad II) from the sale of Florentia Village Guangzhou-Foshan, a luxury outlet mall with a gross leasable area of ~45'000 sqm in Foshan, Guangdong province. During the holding period, active leasing activities increased the asset's occupancy and was offered for sale upon being stabilized. On the back of NOI growth, the asset was sold at 5% above underwriting. China Luxury Outlet Malls (Silkroad II) originally comprised of a portfolio of six luxury outlet malls across tier one and two cities in China. The investment partner will carry out planned expansion initiatives, stabilize operations, and consider exit opportunities for remaining properties in the near- to midterm.
For further information, please enjoy ourlatest Partners Group Global Real Estate Fund (AUD) product video with Max Ilmoni, Managing Director, Private Real Estate, in the link or via the below QR code.
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In April, the NAV per share of the Partners Group Global Real Estate Fund (AU D) increased by 0.7% for the partially hedged share class. Respectively, the NAV for the unhedged share class increased by 1.5%. While both non-listed and listed portfolio receiving minor upward value adjustments, the main performance drivers were related to currency movements.
Since the last month's reporting period, there was one notable event in the underlying portfolio investments, namely the US Multifamily Port-folio (Hamilton).
Partners Group has refinanced one loan secured by three contiguous asse-ts - two multifamily assets and one land asset - located in Austin, Texas in April 2023. Both multifamily assets were financed individually at attractive loan terms for a 10-year duration. We anticipate this debt will provide an in-creased flexibility for advancing the business plan. The recapitalization of the US Multifamily Portfolio was made by Partners Group in 2018, the portfolio currently comprises of two student housing assets, two multifamily assets, one land parcel, and two retail centers located in Austin and Dallas, Texas.
File:March, 2023
In March, the NAV per share of the Partners Group Global Real Estate Fund (AUD) decreased by 1.3% forthe partially hedged share class. Resp - ectively, the NAV forthe unhedged share class decreased by 0.8%. Redemption Fee In the interest of both redeeming and remaining investors, please take into consideration the 4% sell spread introduced last yearforthe benefit of the fund, effective from the November cut-off date (15 November 2022) until further notice During the reporting period, the valuation of European Budget Hotel Platform (Marmor Co-Investment) increased to reflect the higher total revenue per available room across the portfolio compared to the prior quarter.
Furthermore, Globally Diversified Fund Portfolio (Village) distributed proceeds from the sale of several assets in a 2007-vintage Europe-focused fund. Further proceeds are expected to be distributed once the wind-down of the fund has been completed. Globally Diversified Fund Portfolio (Village) comprises a portfolio of six funds invested in office, residential and retail assets located across geographies such as China, India, France, Hong Kong and the US.
File:February, 2023
In February, the NAV per share of the Partners Group Global Real Estate Fund (AUDI increased by 1.3%for the partially hedged share class. ResP - ectively, the NAV for the unhedged share class increased by 4.096.
During the reporting period, capital was inverted in Spanish Logistics Port-folio primarily to finance the acquisition of a development project to build multi-tenant logistics asset with a total gross leasable area of around 130000sqm. The development is located in Ontigola, Toledo, which is about a 40-minute drive from Madrid and is one of Spain's key logistics corridors for larger platforms servicing the entire country. As of 31 March 2023, Spanish Logistics comprised eight logistics properties and six development projects located across Barcelona and Madrid.
Furthermore, Project Immo IV (European Mixed Use) distributed proceeds from the secondary sale of a 200]-vintage riml estate fund focused on Central and Eastern Europe regions. Over the holding period, the fund completed several realNations of assets in IN portfolio including most recent sale of a 50'01110s, class A office building in Belgrade, Serbia. The property accommodates premium office areas, leasing to prominent tenants. The asset was also the first BREEAM certified building and first Green building in the country recognized by any accreditation system. As of 31 December 2022, the fund held a remaining investment in its retail portfolio and two assets in its land development portfolio.
File:November, 2022
In November, the NAV per share of the Partners Group Global Real Estate Fund (AU D) decreased by 1.5% for the partially hedged share class. Resp-ectively, the NAV for the unhedged share class decreased by 4.0%.
During the reporting period, Partners Group made an additional commitment to Columbus and Orlando Industrial Portfolio (TPA) to fund the acquisition of a state-of-the-art 438'720sqft warehouse facility development project. The warehouse will feature a cross-dock configuration with 200ft deep truck courts, ample room for truck queuing, full circulation drive, and com-plete separation between trucks and automobiles. Located in Orlando, the warehouse offers direct access to Florida's primary transportation facilities, including the Beachline Expressway, railway, cruise port, and the Orlando International Airport.
Furthermore, Peakside Real Estate Fund III distributed proceeds mainly from the ongoing sale of a 38'223sqm office asset in Hamburg, Germany. The property accounted for approximately 30% of the portfolio NAV as of 30 September 2022. Acquired in July 2019 as a protected landmark property with a 30-year lease agreement with the local government, the asset is currently being repositioned into a modern office complex. The sale of the asset will be finalized upon completion of repositioning works in 2025.
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In October, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 0.1% forthe partially hedged share class. Respectively, the NAV forthe unhedged share class increased by 0.5%. October NAV per share increased by 0.1% PARTNERS GROUP GLOBAL REAL ESTATE FUND (AUD) Monthly report a s o f 3 1 October 2022 We do not expectthat Equity Trustees Limited will be able to accept redemption requests for the 15 November 2022 and the upcoming 15 December 2022 cut-offs as a result ofthe Master Fund's 5% gate being reached IMPORTANT INFORMATION: We would like to remind investors that redeeming their holdings in the Fund is subject to restrictions as set out in the Fund's constituent documents, including being subject to the ability of the Fund to redeem its holdings in the Underlying Fund. Redemptions are generally subject to a maximum of 5% per calendar quarter expressed as a percentage of the net asset value at the end of the preceding quarter and may be lowered furtherto 2.5%. In certain circumstances redemptions in the Underlying Fund may also be suspended thus affecting redemptions of the Fund.
During the reporting period, Partners Group acquired the land for Phase I of Phoenix Industrial Portfolio (The Base), a 2.0 million sqft industrial project located in the West Valley submarket in Phoenix, Arizona. The industrial project will be developed over two phases. Located near four major freeways, Phoenix Industrial Portfolio (The Base) will comprise 15 class A buildings ranging from approximately 40'000-310'000sqft in size and will target general industrial, manufacturing and light assembly tenants. The business plan involves delivering a large-scale industrial portfolio with smaller-sized buildings and leasing up to stabilize the occupancy level. ESG initiatives will be implemented such as incorporating modern standards of energy efficiency in the buildings' design and sourcing sustainable materials to reduce the project's carbon footprint. Partners Group finds the investment attractive as it is positioned to benefit from the strong demand for industrial buildings in Phoenix, which drives down vacancy and drives up rental rates backed by the continuous growth of e-commerce. The investment is wellpositioned to capture absorption due to the lack of smaller building sizes in the area.
Furthermore, the project is strategically located along major US shipping and distribution routes with proximity to major population centers. The transaction is in line with Partners Group's thematic approach of investing in industrial assets that are located in strong markets with robust ecommerce driven demand and limited supply of space. Furthermore, Partners Group received proceeds from the full realization of Sydney Office Asset (73 Miller Street). Sydney Office Asset (73 Miller Street) is the recapitalization of a 14'672sqm, 11-story class B office building in North Sydney, Australia. Over the 5-year holding period, the property was refurbished to a class A office building and its leasable area was increased by 4'442 sqm through infilling of balcony space. Furthermore, Partners Group signed new leases with a weighted average lease expiry of approximately 7.1 years across reputed tenants.
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In September, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 2.2% forthe partially hedged share class. Respectively, the NAV forthe unhedged share class increased by 6.2%. In September, Partners Group partnered with a London-based investment firm to acquire UK Residential Platform (Richborough), an independent strategic land promotion platform providing landowners with town planning, design, technical, and legal expertise to obtain appropriate residential planning permission before selling the land in an open market process. Partners Group finds the investment attractive as the platform is one of the largest independent land promoters in the UK, with 51 sites promoted over the past six years, or an equivalent of 6'433 buildable units.
The business plan will focus on streamlining and institutionalizing operational processes, such as CRM system implementation, as well as growing the business and expanding its footprint across the UK while executing on its contractually agreed pipeline of 127 sites that is expected to allow for the construction of 25'964 units. Partners Group received final proceeds from the full realization of Project Cargo, a portfolio of 54 modern logistics parks located across China. The investment was realized in July 2022 and generated above-underwritten returns. The valuation of French Mountain Residences (Lachat) increased reflecting the positive financial performance of the premium residences located in the most prestigious ski resorts of the French Alps. For the 8-month period ending 30 June 2022, Lachat reached a record level above-budget turnover as travel restrictions eased in France beginning mid-2021. Founded in 2004 in Annecy, Lachat comprises 35 4-star residences with a total of 2'395 selfcatered apartments. The operator is currently gearing up for the next ski season and is focused on the renewal process of its expiring electricity contracts to secure 2023 operations.
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In August, the NAV per share of the Partners Group Global Real Estate Fund (AUD) decreased by -0.4% forthe partially hedged share class. Respectively, the NAV forthe unhedged share class increased by 0.7%. In August, Partners Group partnered with a US-based real estate development company to develop Columbus Logistics Center, a 1.3 million sqft bulk distribution center in Ohio. The property is strategically situated in one of the most sought-after industrial locations in the country due to its 1-day access drive to nearly 60% of the US population, including New York, Philadelphia, Washington DC, Charlotte, Nashville and Chicago.
Partners Group finds the investment attractive due to the established industrial submarket and the strong market tailwinds that logistics properties are benefiting from Furthermore, Bridge Multifamily Fund IV distributed proceeds mainly from the sale of a 286-unit multifamily property in Phoenix, Arizona. The sale was completed in June 2022 and generated returns above projections. The asset was acquired in January 2020 as a development project and construction was completed in 2021. As of February 2022, the property was approximately 80% occupied with an average rent around 15% ahead of forecasts. Following the sale, the portfolio of Bridge Multifamily Fund IV comprised 58 investments, four of which are development assets.
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In July, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 0.4% forthe partially hedged share class. Respectively, the NAV forthe unhedged share class decreased by 0.4%. In July, Partners Group acquired Finland Warehouse Portfolio, which comprises 18 warehouse and light industrial assets and one office building totaling 141'000sqm of net leasable space. The assets are located in the Helsinki Metropolitan Area (HMA), Tampere and Oulu. At acquisition, the portfolio is 96% leased.
Partners Group finds the investment attractive as it benefits from the strong demand for logistics space backed by the continuous growth of e-commerce. There is also a limited supply of logistics properties due to land-use policies in HMA limiting further developments. The business plan will focus on pursuing lease renewals and leasing up of vacancies to stabilize the portfolio's occupancy level at 96%. Sustainable capital expenditure projects will be carried out on several assets, such as the installation of geothermal energy.
Furthermore, Partners Group received proceeds from the full realization of Project Cargo, a portfolio of 54 modern logistics parks located across 27 cities in China. The recapitalization of the portfolio generated above-underwritten returns. Over the three-year holding period, Partners Group supported the investment value creation initiatives, including active lease management. In addition, new logistics parks (14% of the total gross floor area) were constructed during the holding period.
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May NAV per share decreased by 0.5%
In May, the NAV per share of the Partners Group Global Real Estate Fund (AUD) decreased by 0.5% for the partially hedged share class. Respectively, the NAV for the unhedged share class decreased by 0.7%. The economic en-vironment has become more challenging as central banks have started to in-crease interest rates to fight spiking inflation, igniting further uncertainty in financial markets. Partners Group has been preparing for this change in fun-damentals and is convinced that with our transformational investing appro- ach, which combines thematic sourcing with hands-on value creation, we can navigate such an environment.
During the reporting period, Partners Group partnered with Kairos Living, a single-family home operator, to acquire US Single Family Rental Portfolio (Kairos), a USD 1 billion portfolio of single-family homes in the US. The portfolio comprises 2'528 recently constructed single-family homes and a pipeline of over 1'000 homes under construction across 17 states in the Sunbelt region, with majority in Texas, Alabama, Georgia, and Oklahoma. Fur-ther capital will be invested to acquire and develop additional build-to-rent homes. Partners Group finds this investment attractive due to strong market fundamentals for single-family rental homes driven by the aging millennial demographic that are moving into their household-formation years as well as high cost of home ownership. In addition, the properties are situated in the Sunbelt region - one of the fastest growing areas of the US due to high population and job growth supported by company relocations from expensive and highly regulated metros.
In May, Partners Group, in partnership with Trinity Investment, acquired Dallas Resort Hotel, a 431-key property in the Las Colinas office hub in Texas. The hotel comprises 9-story guest tower and four villas around the TPC Las Colinas championship golf course as well as resort amenities and fitness facilities. The asset stands to benefit from resurging demand for venues as the world recovers from COVID-19. The business plan includes replacing the hotel brand and management, and completing a significant renovation plan. The investment is in line with Partners Group's thematic investing approach focusing on properties in a highly urbanized location with strong market fundamentals.
In addition, the valuation of Globally Diversified Fund Portfolio (Aquila II) increased mainly due to the positive performance of industrial properties within Blackstone Real Estate Partners IX. The main driver was a high-quality, infill logistics portfolio totaling 69 million sqft across the US, which was positively revalued to reflect strong market fundamentals, as well as leasing and recent sales activity. During the first quarter of 2022, 133 lease contracts totaling 3 million sqft were executed, while 1.6 million sqft of non-core assets were sold. In addition, capital expenditure works in properties located in Texas and San Francisco continued to progress, providing the portfolio with significant upside potential. As of 31 March 2022, the opera-tional assets were about 99% leased.
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In April, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 2.2% forthe partially hedged share class. Respectively, the NAV forthe unhedged share class increased by 5.0%. The continued positive performance of the private real estate portfolio was partially offset by the listed portfolio as well as the strengthening of the US Dollar against currencies like the Euro
During the reporting period, Partners Group received further proceeds from the successful sale of a hotel property within the Spanish Mixed-use Portfolio (Forte). The property is a modern 4-star hotel located in downtown Barcelona, in proximity to Sagrada Familia. The property was sold in March 2022 and generated above-underwritten returns as a result of the hotel's excellent location and Partners Group's active asset management during the Covid downturn. The exit price achieved also reflects the expected recovery of the hospitality sector in Spain
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In March, the NAV per share of the Partners Group Global Real Estate Fund (AUD) decreased by 0.5% for the partially hedged share class. Respectively, the NAV for the unhedged share class decreased by 2. %. The positive movement was amongst others driven by the Florida Office Portfolio which has been revalued from 1.09x to 1.46x capturing the increased demand for multifamily and rent growth, now that the multifamily component of the portfolio is soon to be delivered. Overall, the positive performance was overshadowed by the currency impact.
During the reporting period, Partners Group invested in the Oslo Light Industrial Portfolio. It has a seed portfolio of 19 assets with a combined gross asset value (GAV) of EUR 442 million. The properties are strategically located in the Drammen-Langhus-Lillestrøm logistics triangle, a highly attractive area for last mile logistics in Oslo, Norway. The properties generate strong cashflows from over 100 tenants. At acquisition, average portfolio occupancy stood at 96%, with an average lease term of 4.9 years, and 100% annual inflation-adjusted leases. The strong demand for logistics space driven by continued e-commerce growth combined with limited supply is expected to increase rental rates in Oslo. Partners Group plans to further grow the platform to over EUR 1 billion in GAV. In addition, Partners Group will explore opportunities to enhance the ESG credentials of the properties.
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In February, the NAV per share of the Partners Group Global Real Estate Fund (AUD) decreased by 1.0% forthe partially hedged share class. Respectively, the NAV for the unhedged share class decreased by 2.5%. In the real estate portfolio, the main portfolio drivers were valuation uplifts in the non-listed portfolio. Overall, the positive performance was overshadowed by the currency impact.
During the reporting period, Project Cargo was positively revalued due to increased occupancy across the portfolio and an overall positive market environment for logistics assets in China. Project Cargo consists of 54 modern logistics parks located across several cities in China. As of 31 December 2021, the portfolio's assets had a total gross floor area of almost 5 million sqm. Meanwhile, China's economic recovery remains steady with the gross domestic product increasing by 8.1% year over year in 2021.
Buckingham Multifamily Fund 2 called capital to fund several investments, such as a 256-unit multifamily property in Louisville, Kentucky. The property was built in 1988, and the business plan will focus on unit refurbishments, building exterior improvements, and clubhouse renovation. The property is 95% occupied. The fund also acquired a 196-unit apartment complex in Schaumburg, Illinois. The property is located minutes away from O'Hare International Airport and has access to shopping, dining and entertainment options in downtown Chicago. Buckingham Multifamily Fund 2 is a 2020- vintage fund with investments in value-add class B multifamily residential properties in the Midwest and Southeast regions in the US. As of 31 December 2021, the fund had five investments in its portfolio representing approximately 1'400 units with an average occupancy of about 96%.
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In January, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 1.0% for the partially hedged share class. Respectively, the NAV for the unhedged share class increased by 2.2%. The non listed portfolio saw some upward value adjustments consistent with the quality of the Fund's real estate portfolio. Though, the main performance drivers were currency movements, and the listed portfolio which followed broader equity market developments in January. January NAV per share increased by 1.0%. Past performance is not indicative of future results. There is no assurance that similar investments will be made nor that similar results will be achieved. The figures shown in grey before the inception of the unhedged share class represent.
By the end of last year, Partners Group acquired the Boulder Life Science Portfolio, a 7-building, class A life science park in Boulder, Colorado. The portfolio is currently fully leased to a medical device manufacturing company which utilizes four buildings for laboratory and R&D while using the other three buildings for manufacturing. Partners Group acquired the portfolio from a fund that is not allowed to pursue a heavy modernization business plan for the properties. With Partners local presence in neighboring Denver, Colorado, and ability to acquire both the core and value-add buildings in the portfolio we had a strong angle when negotiating with the seller. The business plan will focus on the redevelopment and modernization of the buildings to create wet/dry laboratory spaces. When re-leasing the properties we expect to significantly increase rents to market levels. Life science is one of Partners focus areas within its Thematic Sourcing Strategy. The Boulder market is characterized by undersupply of space and benefits from the state's flagship university, which is a major science and technology hub.
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December NAV per share increased by 0.8% In December, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 0.8% forthe partially hedged share class, bringing last twelve months performance to 14.4%. Respectively, the NAV for the unhedged share class decreased by 0.1%, bringing the last twelve months performance to 17.1%
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In November, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 3.7%, bringing last twelve months performance to 12.6% and annualized net performance since inception to 7.4%. For portfolio activity, the Fund made a new add-on investment, received quarterly interest payments, and saw two positive revaluations
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September NAV per share increased by 1.8%
In September, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 1.8%, bringing last twelve months performance to 10.7% and annualized net performance since inception to 7.3%.
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August NAV per share increased by 2.2%
In August, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 2.2%, bringing last twelve months performance to 10.5% and annualized net performance since inception to 7.0%. This month's performance was primarily attributed to a recent revaluation of our US logistics portfolio, Project Creekside. Additionally, we are happy to report that the Fund does not have any investments in Evergrande Group and no material exposure to the residential sector in China
Project Creekside was written up as Partners Group is currently in the market to sell the entire portfolio. In connection with the sale process we received a broker opinion of value (BOV) in order to gauge pricing expectations, and due to the very strong investor demand in the industrial market plus a portfolio premium from bundling the assets together, the BOV reflected a significant increase when compared to the last round of appraisals from December 2020. Partners Group aligned Project Creekside's value to the lower end of the BOV range
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In July, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 1.3%, resulting in annualized performance since inception of 6.6% and cumulative performance since inception of 31.4%. During July, the Fund received a distribution from the recent sale of Project Bayside, another example of Partners Group's continued effort to reduce the Fund's exposure to office properties. Further, the Fund's hedged and unhedged share classes will make a distribution of AUD 0.128 and AUD 0.017 per unit, respectively, for the period ending 30 June 2021
The exit of Project Bayside was realized at an IRR above 30% and equity multiple above 2.30x, versus a 17.9% IRR and 1.91x multiple originally underwritten. The exit agreement with the new investor includes an earn-out provision subject to future leasing, which could slightly improve the exit equity multiple
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May NAV per share increased by 0.3%
In May, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 0.3%, resulting in annualized performance since inception of 5.7% and cumulative performance since inception of 25.5%. May's per- formance was driven primarily by the distributions paid-out from a German office sale. The real estate team has seen a strong recovery of opportunites on both the investment and exit front.
Recently, Partners Group received proceeds from the sale of Goldenes Haus Frankfurt, a nine-story, 33'000sqm office building located in the City-West office district in Frankfurt, Germany. The sale was completed two years ahead of the business plan and has generated returns above underwritten expectations. Since the acquisition in January 2018, Partners Group's asset management team successfully re-leased the space that was vacated in 2019, above underwriting, as well as restructured the existing lease with an IT services provider. At the point of sale, Goldenes Haus Frankfurt was fully occupied, with an average lease term of more than six years
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April NAV per share increased by 0.6%
In April, the NAV per share of the Partners Group Global Real Estate Fund (AUD) increased by 0.6%, resulting in annualized performance since inception of 5.8% and cumulative performance since inception of 25.2%. April's performance was driven primarily by the distributions paid-out from the US industrial properties sale, which we covered in last month's report and the recent revaluation of Project Bayside, as highlighted below.
Additionally, Project Moon, an office property located in Beijing, China received a letter of intent from an anchor tenant for more than 7'000 sqm with a five-year term. The presence of this reputable anchor tenant is anticipated to further support the image of the building and provide a boost to leasing momentum. Renovation work continues to progress well and remains on track to be completed by Q3 2021 with around 30% of façade work now complete and is currently even below budget.
Project Bayside is an investment in two class-A office buildings, acquired in June 2018, with nearly 260'000 square feet, and located in the San Francisco Bay Area. At acquisition, the property provided an opportunity to raise rents, which were 20% below market levels, with plans to improve occupancy rates to a stabilized level. Additionally, there was a capital expenditure program to renovate the common areas and building amenities, and to improve accessibility to nearby transportation connections. With the emergence of COVID-19, there has been a large impact on traditional office leasing as many tenants (especially tech tenants in the Bay Area) are currently on work-from-home regimes which has slowed their ability to make decisions on office space needs. Concurrently, but positively, the life science sector is seeing unprecedented interest from both tenants and investors. The life science industry encompasses a wide range of sciences, such as pharmaceuticals, biotechnology, and medical devices research. Partners Group's real estate team believes that with this pivot in business plan the property will sell for a premium to a life science developer.
This strategic shift illustrates the building's flexibility to be converted to a more valued site and the flexibility of our asset management team, who is able to change business plans and create value within our direct investments. Both aspects, the property's physical flexibility as well as the potential flexibility in our business plan were key considerations when originally underwriting and acquiring the property in 2018.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/20210430_PG_GL_RE_AUD_E_M__Cv.pdfDecember, 2020
In December, the NAV per share of the Partners Group Global Real Estate Fund (AUD) decreased 0.7%, resulting in annualised performance since inception of 5.6% and cumulative performance since inception of 22.1%. While the performance of the underlying portfolio was positive, the overall Fund was impacted by currency movements, as the AUD appreciated nearly 4.5% against the USD. The Fund's overall size (in millions) increased from AUD 317.44 to AUD 321.44 during the month. Below we highlight a new acquisition at a discount, an update on rent collections and an outlook on the office sector.
During the month, Partners Group acquired Tama Centre, a 24'000sqm Grade-A office building located in Tama New Town, a suburb of Tokyo, Japan. Constructed in 2002, the building has eight stories and two basement floors and is currently fully leased to ten tenants in the insurance and IT sector. Designed by the world-renowned architect Kengo Kuma, Tama Centre features open ceilings and a glass facade, allowing tenants to enjoy flexibility, spaciousness and natural light. Tama Centre is located within 500 meters from the train station with a direct connection to central Tokyo, and with access to several shopping malls and other commercial and leisure establishments.
Partners Group acquired the property on an off-market basis through its direct relationship with the seller. The purchase price represents a discount to third party valuations and provides the basis for offering tenants competitive packages at the time of lease roll-over. Partners Group s business plan focuses on the extension of the weighted average lease term by about one and a half years, which will make the property attractive for future core buyers.
The Fund's existing portfolio continues to perform well. More specifically, rent collection has slightly improved over recent months and the level remains consistent with our observations before March 2020. Partners Group continues to improve the rent collection for its retail assets. Even though retail only represents about 3% of the Fund's investment portfolio, we keep working hard on this part of the portfolio. As a result, we managed to reduce the percentage of unresolved cases on the retail portfolio by 4.9% from 31 July 2020 to 31 December 2020.
We are also pleased with the rent collection and continued strong performance of the Fund's office portfolio. Since the inception of the Fund and in anticipation of a potential market downturn after a more than ten year upcycle, Partners Group has focused on properties that provide the flexibility to meet current, but also future tenant demand. When talking to our office tenants, flexibility is regularly a key topic for them. The trend for companies to offer "work-from-home" options to their staff has further accelerated. It will very likely be a factor that will reduce the amount of space that they want to lease on a long-term basis. At the same time, tenants tell us that they would appreciate the ability to rent additional space if their space requirements increase temporarily, for example by having some co-working space in the building. Co-working space can also provide flexible access to meeting rooms or auditoriums, which not all tenants want to lease and permanently pay rent for.
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https://www.partnersgroupaustralia.com.au/en/our-funds/global-real-estate-fund/#c9505
Performance
Monthly Report ….
fund_features:
Partners Group Global Real Estate Fund AUD seeks to provide investors with attractive long-term capital appreciation by investing in a globally diversified portfolio of real estate and related investments by investing the Underlying Fund. The principal elements of the Underlying Fund’s investment strategy include (i) asset allocation broadly across private real estate markets and related asset classes, (ii) sourcing investment opportunities, (iii) selecting the investments that are believed to offer superior relative value, (iv) seeking to manage the investment level and liquidity, and (v) seeking to manage risk through ongoing monitoring of the portfolio. The Fund appeals to high-net-worth investors seeking access to an institutional grade offering, real estate secondaries and global private real estate. Local real estate investors seeking diversification from a truly global portfolio (i.e. multiple ‘property clocks’) and immediate deployment of capital without foregoing liquidity (liquidity subject to certain restrictions).
structure: Managed Fund