September, 2023
The Ironbark Global (ex-Australia) Property Securities Fund (the ‘Fund’) returned -5.10% (net) for the quarter, outperforming the FTSE EPRA/NAREIT Developed Rental ex-Australia Index (hedged to $A, net) return of -5.78% by 0.68%.
Overall, outperformance was driven by positive stock selection. Allocation wise, the overweight to outperforming UK and bucket allocation in Continental Europe contributed. However, this was more than offset by the underweight to outperforming Continental Europe and bucket allocation in the Americas which detracted. At the stock level, selection was particularly strong in the Americas, Japan, Continental Europe, Australia, and Asia ex-Japan while the UK had a minor negative impact.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx-Quarterly-Report-9.pdfJune, 2023
The Ironbark Global (ex-Australia) Property Securities Fund (the ‘Fund’) returned 1.55% (net) for the quarter, outperforming the FTSE EPRA/NAREIT Developed Rental ex-Australia Index (hedged to $A, net) return of 0.66% by 0.89%. Overall, outperformance was driven by positive stock selection while allocation was a modest detractor from relative performance. Allocation wise, the underweight to underperforming continental Europe contributed, however, this was more than offset by the overweight to underperforming UK, and bucket allocation in the Americas which had a negative impact. At the stock level, selection was particularly strong in the Americas, Japan, and continental Europe. Asia ex-Japan also made a modest contribution while the UK detracted.
Americas performance review
The Americas portion of the portfolio returned 3.1%, outperforming the local benchmark return of 2.0% (in local currency terms). In the Americas, positive selection more than offset negative allocation. From an allocation perspective, the overweight to outperforming data centers was the leading contributor. Some of this outperformance could be attributed to artificial intelligence euphoria fuelling the next growth cycle, but there are also some emerging trends in fundamentals and new construction. Data centers owners are gaining the upper hand in lease negotiations and are able to ask for more rent for space needs while also pushing through higher costs for power. Certain markets, such as Loudon County in Virginia (aka Data Center Alley), have seen a drop in new supplies. Meanwhile, selection was broadly positive led by healthcare, industrial, specialty, residential and self-storage. The only exception was net lease which had a minor negative impact on relative performance during the period.
Europe performance review
The UK portion of the portfolio returned -8.6%, underperforming the local benchmark return of -7.3% (in local currency terms), whilst the Continental Europe portion of the portfolio returned 2.0%, outperforming the local benchmark return of -2.5% (in local currency terms).
In the UK, positive selection within the smaller, niche orientated property stocks were more than offset by negative selection amongst the large caps. Amongst the smaller, niche orientated property stocks the overweight to outperforming Life Science REIT PLC was the leading contributor while amongst the large caps British Land Company PLC detracted as large caps with office and retail exposure bore the brunt of the selling. On the continent, selection was particularly strong in the Nordics. The underweight to Samhallsbyggnadsbolaget I Norden AB was a top contributor as the highly indebted Swedish commercial landlord halted dividend payments and cancelled a rights issue after S&P cut the firm’s credit rating.
Asia performance review
The Asia ex-Japan portion of the portfolio returned -6.5%, underperforming the local benchmark return of -6.2% (in local currency terms), whilst the Japan portion of the portfolio returned 9.6%, outperforming the local benchmark return of 5.0% (in local currency terms).
In Asia ex-Japan, overweight positions to Developers and REITs in Hong Kong had a negative impact as concerns over China’s cooling economy and higher rates weighed. This was partially balanced by positive selection amongst the Singapore REITs, namely the overweight to outperforming data center REIT, Keppel DC REIT. Meanwhile, in Japan, selection was strong amongst the REITs with the standout being the overweight to outperforming Kenedix retail REIT which spiked on merger news.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx-Quarterly-Report-8.pdfMarch, 2023
The Ironbark Global (ex-Australia) Property Securities Fund (the ‘Fund’) returned 0.72% (net) for the quarter, outperforming the FTSE EPRA/NAREIT Developed Rental ex-Australia Index (hedged to $A, net) return of 0.01% by 0.71%.
Overall, stock selection contributed to relative performance while allocation had a neutral impact. From an allocation perspective, the underweight to underperforming Japan was the leading contributor. However, this was more than offset by the underweight to outperforming Continental Europe and bucket allocation in the Americas which detracted. At the stock level, selection was particularly strong in the Americas, Asia ex-Japan and the UK. Selection was also positive in Continental Europe while Japan had a minor negative impact.
Americas performance review
The Americas portion of the portfolio returned 5.2%, outperforming the local benchmark return of 4.8% (in local currency terms).
Positive stock selection helped to more than offset negative bucket allocation. From an allocation perspective, the underweight to underperforming office was the leading contributor. Office faces a tough economy and demand drivers flashing warning signals (i.e., business confidence). The sector also remains under pressure from the impact of COVID-19; leasing volumes are muted and, thus far, employers remain flexible and accommodative towards work-from-home trends in a tight labour market. Conversely, the underweight to outperforming malls was the leading negative contributor. Malls were up strongly given resilient consumer demand trends. The exposure to US towers also detracted. Higher rates and FX were a headwind early in the quarter, while forward guidance from one of the major tower companies came in below expectations, weighing on the group overall. At the stock level, selection was particularly strong within data centers, residential and healthcare. This was partially balanced by negative selection within office and industrial.
Europe performance review
The UK portion of the portfolio returned 7.5%, outperforming the local benchmark return of 4.1% (in local currency terms), whilst the Continental Europe portion of the portfolio returned 6.0%, performing in-line with the local benchmark of 6.0% (in local currency terms).
In the UK, selection within the smaller, niche orientated property stocks was very strong. The standout was the overweight to outperforming Grainger. ‘Build-to-rent’ focused Grainger delivered a strong result, delivering on its private rental pipeline and benefitting from strong rent growth which is correlated to wage inflation. Looking ahead, Grainger expects rising mortgage costs to drive rental demand. Meanwhile in Continental Europe, positive selection within retail was balanced by negative selection amongst the Nordic property stocks.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx-Quarterly-Report-7.pdfDecember, 2022
The Ironbark Global (ex-Australia) Property Securities Fund (the ‘Fund’) returned 4.24% (net) for the quarter, outperforming the FTSE EPRA/NAREIT Developed Rental ex-Australia Index (hedged to $A, net) return of 4.11% by 0.13%.
Overall, stock selection contributed to relative performance while allocation had a neutral impact. From an allocation perspective, the underweight to underperforming Japan was the leading contributor. However, this was more than offset by the underweight to outperforming Continental Europe and bucket allocation in the Americas which detracted. At the stock level, selection was particularly strong in the Americas, Asia ex-Japan and the UK. Selection was also positive in Continental Europe while Japan had a minor negative impact.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx-Quarterly-Report-6.pdfSeptember, 2022
The Ironbark Global (ex-Australia) Property Securities Fund (the ‘Fund’) returned -11.43% (net) for the quarter, underperforming the FTSE EPRA/NAREIT Developed Rental ex-Australia Index Net Hedged to $A return of -10.92% by 0.51%. Overall, allocation and stock selection slightly detracted from relative performance. From an allocation perspective, the underweight to underperforming Continental Europe was the leading contributor. However, this was more than offset by the overweight to underperforming UK and bucket allocation in the Americas and Continental Europe which detracted. At the stock level, selection was positive in Japan and Asia ex-Japan, however this was balanced by negative selection in the UK, Continental Europe and the Americas
Americas performance review
The Americas portion of the portfolio returned -10.6%, underperforming the local benchmark return of -10.2% (in local currency terms). Bucket allocation and selection were modest detractors over the quarter. The underweight to the more economically sensitive mall sector was the leading negative contributor. The recovery-oriented segments such as malls caught a bid early in the quarter as Federal Reserve expectations moderated, while recent macro retail sales trends along with mall foot traffic have held up better-thanexpected. The average overweight position to the more interest rate sensitive healthcare sub-sector also detracted. Meanwhile, the allocation to residential contributed. With rents headed higher and a lack of affordable housing, residential held up better than most amidst the late quarter selloff.
Europe performance review
The UK portion of the portfolio returned -20.5%, underperforming the local benchmark return of -19.5% (in local currency terms), whilst the Continental Europe portion of the portfolio returned -16.3%, underperforming the local benchmark of -13.4% (in local currency terms).
In the UK, selection amongst the large capitalisation stocks was a minor contributor, however, this was more than offset by negative selection amongst the smaller, niche orientated property stocks. Meanwhile, in Continent Europe, bucket allocation and selection had a negative impact. The underweight to the traditionally defensive Swiss property stocks detracted, along with the exposure to the interest rate sensitive residential sub-sector. Selection amongst residential, the Nordics and retail also contributed negatively to relative performance.
Asia performance review
The Asia ex-Japan portion of the portfolio returned -9.1%, underperforming the local benchmark return of -9.0% (in local currency terms), whilst the Japan portion of the portfolio returned 1.3%, outperforming the local benchmark return of -0.2% (in local currency terms).
In Asia ex-Japan, selection was strong amongst the Hong Kong SAR landlords, however this was partially balanced by negative selection within the Singapore REITs. Hong Kong SAR landlord Wharf real estate Investment was a leading contributor. Wharf caught a bid after announcing a better-than-expected first half of 2022 result, driven by Hong Kong investment properties margin improvement while easing COVID-19 curbs lent support into quarter end. Meanwhile, in Japan, selection was particularly strong amongst the REITs, notably the overweight to outperforming Mori Trust Hotel REIT. Hotel-related stocks were well supported on the view that earnings would continue to recover despite concerns about lackluster travel demand in July and August owing to fresh COVID-19 outbreaks. The further easing of travel curbs late in the period also provided a boost. Elsewhere, the overweight to outperforming Activia Properties and Global One Real Estate Investment also contributed to relative performance.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx-Quarterly-Report-5.pdfJune, 2022
The Ironbark Global (ex-Australia) Property Securities Fund (the ‘Fund’) returned -18.23% (net) for the quarter, underperforming the FTSE EPRA/NAREIT Developed Rental ex-Australia Index Net Hedged to $A return of -17.05% by -1.18%.
Overall, allocation contributed to relative performance and stock selection detracted. From an allocation perspective, the underweight to underperforming Continental Europe had a positive impact, along with bucket allocation in the Americas. This was partially offset by the underweight to outperforming Japan and Asia ex-Japan, and bucket allocation in Continental Europe which detracted. At the stock level, selection was positive in the United Kingdom, however, selection in the Americas, Continental Europe, Japan and Asia ex Japan was negative.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx-Quarterly-Report-4.pdfMarch, 2022
The Ironbark Global (ex Australia) Property Securities Fund (the ‘Fund’) returned -4.91% (net) for the quarter, underperforming the FTSE EPRA/NAREIT Developed Rental ex-Australia Index Net Hedged to $A return of -3.61% by -1.30%.
Overall, allocation and stock selection both had a negative impact on relative performance. From an allocation perspective, the leading negative contributors were bucket allocation in the Americas and Continental Europe. The underweight to outperforming Asia ex Japan also had a negative impact. At the stock level, selection was positive in Asia ex Japan, Continental Europe and Japan, however, this was more than offset by negative selection in the Americas and UK.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx-Quarterly-Report-3.pdfJune, 2021
The Ironbark Global (ex Australia) Property Securities Fund (the ‘Fund’) returned 10.11% (net) for the quarter, outperforming the FTSE EPRA/NAREIT Developed ex-Australia Index Net Hedged to $A return of 9.15% by 0.96%. Overall, allocation and stock selection contributed to relative performance. From an allocation perspective, the leading contributors were positive bucket allocation in the Americas and Continental Europe, while the underweight to underperforming Asia Ex Japan and Japan also had a minor positive impact. This was partially balanced by the underweight to outperforming Continental Europe which detracted. At the stock level, selection was positive across the board, in particular within the Americas, Asia Ex Japan and Continental Europe.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx_Factsheet.pdfMarch, 2021
The Ironbark Global (ex-Australia) Property Securities Fund (the ‘Fund’) returned 7.74% (net) for the quarter, outperforming the FTSE EPRA/NAREIT Developed Index return of 7.49% by 0.25%. Overall, allocation contributed, and stock selection detracted from relative performance over the quarter. From an allocation perspective, the leading contributor was the underweight to underperforming Continental Europe. Positive bucket allocation in the Americas was another strong contributor over the period, the overweight to reopening plays malls and hotels, and the underweight to data centres. This was partially offset by the overweight to underperforming UK and underweight to outperforming Japan which had a minor negative impact. At the stock level, selection was particularly strong in the Japan and Asia ex Japan, while selection was negative in the Americas, Continental Europe, and the UK.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx-Quarterly-Report-2.pdfDecember, 2020
The Ironbark Global (ex-Australia) Property Securities Fund (the ‘Fund’) returned 9.75% (net) for the quarter, underperforming the FTSE EPRA/NAREIT Developed Index return of 10.46% by 0.71%. Overall, allocation and stock selection both detracted from relative performance over the quarter. From an allocation perspective, the underweight to underperforming Japan was the leading contributor, however this was more than offset by negative bucket allocation in the Americas. At the stock level, selection was particularly strong in Japan. However, selection detracted in the Americas, Continental Europe and the UK.
File: https://commentary.quantreports.net/wp-content/uploads/2020/12/Ironbark-GPSx-Quarterly-Report-1.pdfSeptember, 2020
Performance review
The Ironbark Global (ex-Australia) Property Securities Fund (the ‘Fund’) returned 1.98% (net) for the quarter, outperforming the FTSE EPRA/NAREIT Developed ex-Australia Index return of 0.60% by 1.38%.
Overall, allocation and stock selection both contributed to relative performance during the quarter. From an allocation perspective, the contributors were positive bucket allocation in Asia ex Japan and the UK, along with the underweight to underperforming Asia ex Japan. This was partially offset by the overweight to underperforming UK. At the stock level, selection was particularly strong in Asia ex Japan, Japan and the Americas, while Continental Europe also contributed.
Americas performance review (continued)
The Americas portion of the Fund returned 2.0%, outperforming the local benchmark return of 0.5% (in local currency terms).
In the US, bucket allocation had a slight negative impact, led by the underweight to outperforming hotels and exposure to retail, while the underweight to office contributed. At the stock level, selection was particularly strong within the apartments, office and net lease sub-sectors. Amongst apartments, the underweight to underperforming equity residential was the leading contributor. Equity residential, which owns a portfolio largely centered around central business districts, came under pressure as renter priorities shift as a result of remote working trends due to COVID 19.
Europe performance review
The UK portion of the Fund returned -2.5%, outperforming the local benchmark return of -2.7% (in local currency terms), whilst the Continental Europe portion of the Fund returned 3.9%, outperforming the local benchmark of 3.0% (in local currency terms).
In the UK, positive selection amongst the large caps were offset by negative selection within the smaller-niche property stocks. Amongst the large caps, the leading contributor was the underweight to shopping Centre landlord Hammerson PLC which fell sharply after announcing funding plans, including a highly dilutive rights issue and asset disposals. The overweight to logistics REIT, Segro PLC was another standout as fundamentals remain strong. Meanwhile, amongst the smaller-niche property stocks the exposure to student accommodation provider Unite Group PLC detracted as it came under pressure amid the resurgence in COVID 19 cases late in the quarter.
In Continental Europe, the overweight to German residential was a standout as earnings highlighted that volumes and price growth remain robust. Selection was also strong, namely within diversified, Nordics, office and residential.
Asia performance review
The Asia ex Japan portion of the Fund returned 3.7%, outperforming the local benchmark return of -2.3% (in local currency terms), whilst the Japan portion of the Fund returned 5.2%, outperforming the local benchmark return of 3.3% (in local currency terms).
In Asia ex Japan, bucket allocation and stock selection contributed. At the bucket level, the underweight to Hong Kong landlords, and exposure to Hong Kong REITs contributed. Meanwhile, selection was particularly strong amongst the Hong Kong developers and Hong Kong landlords. Amongst the Hong Kong developers, the overweight to outperforming New World Development was a standout with forward looking earnings guidance upbeat.
In Japan, stock selection was strong amongst both the developers and REITs. Amongst the developers, the overweight to outperforming Daiburu Corporation was a standout contributor as it reported a solid result which showed minimal impact from COVID 19. Meanwhile, within the REITs the overweight to Mori Trust Hotel REIT was the top contributor. Hotels caught a bid amid reports the government was considering making trips ending and starting in Tokyo eligible for the ‘Go To Travel’ campaign that provides subsidies for domestic based travel, along with solid accommodation demand during the Silver Week holiday.
Market outlook
Across the real estate landscape, the investment manager is focused on current valuations and the likelihood of cash flows to recover to pre-COVID 19 levels as a framework to assess potential opportunities. The Fund’s stabilised cash flows projections suggest retail and hotels are likely to see the most severe damage, while certain sectors, such as cellular towers and data centres, will come out as winners longer-term. Near-term, certain sectors and regions may see weakness, such as hotels and developers, but longer-term opportunities could arise. As such, the investment manager remains selective, with a bias towards companies with limited balance sheet risk and innovative management teams as COVID 19 has presented very unique risks across the property market, such as extremely uncertain occupancy rates in prime office location, or demand coming to a standstill for high-end retail and restaurants. Overall, the investment manager retains a balanced approach with exposure to shorter-term value opportunities coupled with resilient growth.
From a long-term perspective, the investment manager believes performance for public (listed) real estate to ultimately be driven by the pricing and fundamentals of their underlying assets. Lastly, while broader sector level themes may influence regional property market performance, the investment manager believes stock selection will be the key driver going forward in this market. A focus on global property stocks with high-quality assets and sustainable business models should provide the most favourable risk and return profile.
ticker: MGL0010AU
commentary_block: Array
factsheet_url:
Performance -> Quarterly Report
https://ironbarkam.com/funds/ironbark-global-ex-australia-property-securities-fund/
release_schedule: Quarterly
fund_features:
Ironbark Global (ex-Australia) Property Securities Fund seeks to outperform its benchmark, after fees, over rolling three-year periods.
- The Fund invests in property securities listed on recognised stock exchanges around the world (excluding Australia).
- It may also invest in unlisted Initial Public Offering (‘IPO’) securities, provided those securities are expected to be listed within three months of issue.
- Access to DWS’s highly regarded real estate research and other international resource teams.
- DWS integrates environmental, social and governance (’ESG’) factors into their company-level analysis with each component scored in a stand-alone category
manager_contact_details: Array
asset_class: Property and Infrastructure
asset_category: Global Listed Property
peer_benchmark: Property - Global Listed Property Index
broad_market_index: Dvlp Global Real Estate
structure: Managed Fund