September, 2023
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -8.7% for the month ended 30 September 2023, underperforming the Australian equities market (S&P/ASX 300 Total Return Index). A-REITs underperformed as global bond yields rose significantly over the month with fewer 2024 Federal Reserve interest rate cuts now expected in the U.S.
The Australian 10-year bond yield is at the highest level in more than a decade. Australian listed infrastructure outperformed property.
The Reserve Bank of Australia (RBA) held the cash rate at 4.1% in September in line with expectations but again noted “some further tightening may be required” depending on economic data. August inflation re-accelerated and the unemployment rate held at 3.7%.
Within A-REITs the office and industrial sectors outperformed, whilst retail and property fund managers underperformed. Broadly, the Portfolio’s infrastructure exposure contributed to relative performance.
Outperforming A-REITs included land lease community developer Ingenia Communities (INA) and Centuria Industrial REIT (CIP). Media speculation suggested INA was close to selling some seniors living assets. CIP sold two assets at Jun-23 book values whilst the stock price implies significant property devaluations. The Portfolio’s overweight positions in INA and CIP contributed to relative performance.
Underperforming A-REITs included interest rate sensitive property fund managers Cromwell (CMW), Charter Hall (CHC) and Home Consortium (HMC). High interest rates present headwinds to earnings via downward pressure on asset valuations and therefore management fees, as well as limiting transactional activity and equity inflows. The Portfolio’s underweight positioning in property fund managers contributed to relative performance.
Several A-REITs announced management changes. GPT appointed Charter Hall’s current Chief Financial Officer (CFO) as its new CEO. Soon after Charter Hall announced GPT’s current CFO would replace its outgoing CFO. Elsewhere, neighbourhood shopping centre landlord Region Group (RGN) announced the resignation of its Chief Operating Officer. At the start of October, Cromwell Property Group announced the resignation of its Chief Financial Officer.
Turning to deals, fund manager Centuria Capital (CNI) announced a new $500m institutional mandate targeting industrial assets.
With respect to transactions, the media reported that a partnership managed by retail landlord Vicinity Centres (VCX) sold Midland Gate, a regional shopping centre in Perth, for ~$465m representing an almost 15% discount to its pre-pandemic valuation. No yield was disclosed. Elsewhere, a property syndicator acquired a 50% stake in the Stockland Townsville shopping centre at a 12% discount to Jun-23 book value representing a ~8% yield.
In infrastructure, toll road operator Transurban (TCL) saw the Australian Competition and Consumer Commission (ACCC) oppose its proposed acquisition of a majority interest in the Victorian Eastlink toll road. The ACCC’s decision was on the basis that the transaction would lessen competition for future toll road concessions in the state. Separately, TCL appointed its current Head of Victoria and Strategy to the vacant CFO slot after the former CFO was promoted to CEO. The Portfolio’s TCL position contributed to relative performance.
Portfolio holding U.K. water utility Severn Trent (SVT) raised £1bn of equity representing ~18% of shares outstanding to help fund a large capex pipeline which will see the regulated asset base grow ~6% p.a. between 2025-30 on a real basis. The Portfolio participated in the raising. The Portfolio’s SVT position contributed to relative performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-20.pdfAugust, 2023
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 2.2% for the month ended 31 August 2023, outperforming the Australian equities market (S&P/ASX 300 Total Return Index). Australian listed Infrastructure underperformed property.
The relative strong A-REIT sector performance was largely driven by industrial landlord and developer Goodman Group (GMG).
Consequently, within A-REITs the industrial sector outperformed, specialist and retail sectors trailed slightly whilst the office and diversified sectors underperformed. Broadly, the Portfolio’s infrastructure exposure detracted from relative performance.
August was filled with FY23 earnings results and maiden FY24 earnings guidance. Outperforming A-REITs included industrial REIT Goodman Group. Goodman reported strong operating fundamentals, guided to a near sector-leading 9% FY24 earnings growth and disclosed a large data centre pipeline underpinning future development earnings.
The Portfolio’s underweight position in GMG detracted from relative performance.
Underperforming A-REITs included office and industrial landlord Growthpoint (GOZ) and diversified Charter Hall Long WALE REIT (CLW). Both companies have above sector average financial leverage. Higher debt costs are a key drag as GOZ guided to -15% FY24 earnings growth and CLW -7% for FY24 after -8% in FY23. The Portfolio’s underweight positions in GOZ and CLW contributed to relative performance.
Key A-REIT reporting season themes include:
• Few A-REITs will grow earnings in FY24 owing to higher debt costs overwhelming revenue growth.
• More FY24 earnings guidance misses than beats, generally due to new interest rate hedging crystallising higher FY24 debt costs.
• Office remains challenging. Occupancy was broadly stable though some reported declines. Tenant incentives remain elevated and the tone softened on proposed developments. Several A-REITs are trying to sell assets though buyers remain cautious. Dexus (DXS) sold 1 Margaret St, Sydney for 21% below Jun-22 book value and retained an equity holding given the acquirer could not raise all of the required capital.
• Retail metrics were encouraging. Occupancy is high (>98.5%), leasing spreads improved to flat/positive and retailers are generally in good financial shape heading into a tougher environment. Supply of new centres is low. Sales growth is decelerating into FY24, particularly for discretionary categories, likely impacting occupancy and leasing spreads. Rising property expenses inc luding insurance/utilities/taxes are pressuring net rent growth.
• Industrial conditions remain favourable though there are some signs of demand softening from a high base. Occupancy is high (~99%), supply is delayed due to planning and new deal rents accelerated in 2H23 to >20% above in-place rents. Mirvac (MGR), Stockland (SGP) and GPT continue to prioritise growing industrial exposure, generally via development.
• Residential sentiment is subdued near-term with more optimism into CY24 if interest rates stabilise. Affordability is constraining demand and first home buyers are absent, hit by lower borrowing capacity. Sales are at historically low levels though sequentially improving from the 2022 trough. Enquiry has lifted but conversion is slow. Buyer defaults are above cyclical ave rages. Positively, A-REIT residential developers are winning market share, production constraints are easing and construction cost inflation is moderating. Medium-term support from undersupply and migration remains intact.
• Headwinds for fund managers persist. Transaction volumes are subdued, downward valuation pressure remains and equity inflows have slowed with some funds needing to satisfy redemptions.
• Self-storage FY24 revenue growth is slowing to long-run ~4-5% from elevated levels during the pandemic years. In FY23 occupancy loss was offset by rate growth. For both National Storage REIT (NSR) and Abacus Storage King (ASK) development is a key growth driver with attractive returns.
Auckland Airport (AIA) resumed paying dividends as FY23 passenger volumes recovered to 75% of 2019, aided by international back to 86% in Jun-23 but domestic plateauing at 84% due to airline capacity constraints. AIA guided to higher profitability in FY24, albeit less than expected, due to a continued recovery in passengers and retail income, property developments and higher aeronautical tariffs associated with its monumental $6.6bn 10-yr capex plan which includes a new domestic terminal.
Toll road operator Transurban (TCL) reported an FY23 result which slightly missed expectations due to higher costs and weaker traffic in the fourth quarter, with Sydney and Melbourne still below 2019. Future earnings growth is underpinned by new road development completions and TCL remains interested in acquiring a stake in Eastlink. The new CEO will likely maintain the existing strategic focus on growing a sustainable dividend as traffic stabilises on new road developments, rather than pursuing new capital intensive pro jects.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-19.pdfJuly, 2023
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 3.9% for the month ended 31 July 2023, outperforming the Australian equities market (S&P/ASX 300 Total Return Index). Australian listed Infrastructure slightly outperformed property.
After two months of consecutive rate rises the Reserve Bank of Australia (RBA) held the cash rate at 4.1% in July. Sentiment regarding future interest rate rises shifted downward with the consumer price index (CPI) numbers for July coming in below market expectations.
Within A-REITs, the specialist and retail sectors outperformed whilst the industrial and residential sectors underperformed. Broadly, the Portfolio’s infrastructure exposure detracted from relative performance.
It was a relatively quiet month in terms of news flow ahead of the August reporting season. Outperforming A-REITs included agricultural REIT Rural Funds (RFF). RFF rebounded in July after a year of underperformance on the back of balance sheet concerns. Moreover, the REIT declared its final FY23 distribution in-line with guidance. The Portfolio’s underweight position detracted from relative performance.
Underperforming A-REITs included pub landlord Hotel Property Investment (HPI). During the month the Victorian Government announced its intention to implement a number of electronic gambling machine reforms. HPI has limited Victoria exposure, but other states could follow suit. The Portfolio’s overweight position detracted from relative performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-18.pdfJune, 2023
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -0.1% for the month ended 30 June 2023, underperforming the Australian equities market (S&P/ASX 300 Total Return Index).
To curb elevated inflation the Reserve Bank of Australia (RBA) hiked interest rates in June by 0.25% to 4.1%. The RBA has increased rates at 12 of 13 meetings since May 2022 to the highest level since 2012.
Within A-REITs, industrial and diversified sectors outperformed whilst the retail and office sectors underperformed. Broadly, the Portfolio’s infrastructure exposure detracted from relative performance.
Outperforming A-REITs included fund manager Home Consortium (HMC) and office/self-storage landlord Abacus (ABP). HMC announced it had raised $350m in institutional capital for a new unlisted retail property fund. The Portfolio’s underweight position detracted from relative performance. ABP raised $225m of equity for its proposed new externally managed self-storage REIT tentatively named Abacus Storage King (ASK). Pricing of the new REIT reflected a 10% discount to Net Tangible Assets and the Portfolio participated in the raising. The Portfolio’s overweight position in ABP contributed to relative performance.
Underperforming A-REITs included retail landlord Region Group (RGN) and diversified landlord Charter Hall Long WALE REIT (CLW). RGN and CLW were amongst several A-REITs to announce preliminary June 2023 appraisal property valuations. RGN’s book value was marked down 1.7% whilst CLW’s was down 5.8%. The Portfolio’s overweight position in RGN detracted from relative performance whilst the underweight position in CLW contributed positively.
Broadly, appraised based property values have started to fall reflecting the pressure of higher interest rates and most importantly actual transactional evidence after a period limited activity. However, in aggregate A-REIT property values only fell ~3% over the six month period as capitalisation rates expanded by ~25 basis points, partially offset by higher income growth.
Appraised devaluations were most pronounced in office (down 4-8%) whilst non-discretionary retail was down 1.5-4.0%. Industrial, self-storage and childcare values were flat with rent growth offsetting cap rate expansion. Mall landlords have yet to report.
Some notable transactions took place this month. Office landlord Dexus (DXS) sold an A-grade office building at 44 Market St, Sydney for $393m reflecting a 17% discount to book value, 6.6% cap rate and ~$12,800/sqm. The asset has a short 3-year lease expiry and is only 85% occupied. DXS also sold a business park asset in Victoria for $306m at a 7% premium to book value, bringing total FY23 divestments to ~$1.5bn. DXS has a large development pipeline to fund. The Portfolio’s underweight position contributed to relative performance.
We expect further devaluations will eventuate with more transactional evidence over 2023 as the market has had time to absorb and adjust to higher interest rates and more challenging economic conditions. A-REIT stock prices already reflect significant devaluations suggesting ~15%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-17.pdfMay, 2023
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -1.8% for the month ended 31 May 2023, outperforming the Australian equities market (S&P/ASX 300 Total Return Index). The portfolio underperformed the index.
After pausing in April, the Reserve Bank of Australia (RBA) unexpectedly hiked interest rates in May by 0.25% to 3.85%. Later in the month the unemployment rate rose from 3.5% to 3.7% but the monthly inflation indicator came in above expectations.
Within A-REITs, office and industrial outperformed while the diversified and retail sectors underperformed. Whilst house prices rose for a third consecutive month, residential developers generally underperformed after recent strong performance amid the renewed prospect of higher interest rates. Broadly, infrastructure outperformed real estate.
Outperforming A-REITs included fund manager Home Consortium (HMC), which announced progress in capital raising efforts for new healthcare and retail funds, and office landlord Dexus (DXS) which provided a quarterly update in which office occupancy increased by 0.1% to 95.4% and tenant incentives moderated. The Portfolio’s underweight positioning in both stocks detracted from relative performance.
Underperforming A-REITs included retail landlords Vicinity Centres (VCX) and Scentre Group (SCG). VCX upgraded FY23 earnings guidance to the top end of the prior range, which represents 11% growth, aided by recovering ancillary income. For the first time since 2018 leasing spreads turned positive. VCX also announced the sale of a 50% stake in its Broadmeadows regional mall at a ~4% premium to book value. Proceeds will fund developments.
Weighing on retail sentiment was likely several discretionary retailers (i.e. tenants) reporting slowing sales. The portfolio’s overweight positioning in both stocks detracted from relative performance.
Operating conditions remain favourable for industrial landlords with market rental growth buoyed by low current vacancy and tenant demand exceeding supply. Rent growth is offsetting capitalisation rate expansion, supporting valuations.
Goodman Group (GMG) upgraded FY23 earnings growth guidance from 13.5% to 15%. Although development work in progress fell 7% the $7bn p.a. production rate remained stable. Development margins are attractive and GMG is doing more development on balance sheet. Higher returning data centres now constitute 30% of the pipeline. Other landlords including GPT (GPT) and Centuria Industrial REIT (CIP) also reported accelerating double digit industrial releasing spreads. Underweight positioning in GMG, predicated on relative valuation, detracted from relative performance, whilst underweight positioning in GPT contributed.
Self-storage and office landlord Abacus (ABP) announced revaluations ahead of its proposed creation of an externally managed storage A-REIT. Self-storage values rose 2.6% whilst office/retail fell 5%.
Toll road operator Transurban (TCL) held an investor day at which it messaged that its capital-intensive greenfield projects are being progressively completed. As such the model is moving more towards dividend growth, as road traffic matures, and brownfield projects such as road widenings. TCL did signal interest in bidding for a stake in Victoria’s Eastlink road and lifted dividend guidance by 1.8%.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-16.pdfApril, 2023
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 5.2% for the month ended 30 April 2023, reversing last month’s losses, and outperformed the Australian equities market by 3.4% (S&P/ASX 300 Total Return Index). The Portfolio underperformed the index.
During the month the Reserve Bank of Australia (RBA) kept interest rates on hold. This was the first pause after nine consecutive increases.
Australian housing values appear to have bottomed out. After falling 9.1% between May 2022 and February 2023 CoreLogic’s national Home Value Index increased by half a percent in April, following a 0.6% lift in March. The RBA interest rate pause, combined with recovering housing prices, made residential exposed A-REITs the top performers within the index, with Mirvac Group (MGR), Stockland (SGP) and Ingenia Communities all producing double digit total returns during the month.
The second-best performing sector was retail, whilst industrial lagged this month. Broadly, infrastructure underperformed real estate.
Two residential exposed A-REITs provided quarterly updates. First, MGR reduced its FY23 EPS guidance by 5% due to delays in residential settlements and development profits being pushed into the next year. It also announced progress in capital initiatives by finding two new investors for its Build to Rent segment and partners for new office and industrial development.
Second, SGP’s reiterated its FY23 profit guidance pre-tax, with tax payable expected to be at the lower end of 5-10% guidance range. Management highlighted improving residential sales rates, albeit they remain ~30% below its 13- year quarterly average. Within the company’s expanding land lease platform it has 21 projects in the pipeline and will look to deliver over 1,000 lots per year over the “medium term” up from 350 lots in FY23.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-15.pdfMarch, 2023
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -6.8% for the month ended 31 March 2023, underperforming the Australian equities market by 6.6% (S&P/ASX 300 Total Return Index).
During the month the Reserve Bank of Australia (RBA) raised interest rates by 0.25% to 3.60% but suggested a pause is likely near term. The failure of Silicon Valley Bank in the U.S., and the bail-out of Credit Suisse by UBS in Europe, highlighted the fragility of banks with weak capital structures and concentrated asset exposures. What this means for the broader market including REITs and infrastructure is likely tighter lending conditions and reduced credit availability for sectors with weak operating fundamentals such as office.
Within A-REITs, industrial outperformed whilst retail was in line with the benchmark and the diversified, fund managers and office sectors underperformed. Defensive, lower leveraged A-REITs generally outperformed. Broadly, infrastructure outperformed real estate.
The best performing A-REITs included residential developer and diversified landlord Stockland (SGP) and self-storage REIT National Storage (NSR).
Stockland likely benefitted from the RBA nearing a pause in hiking interest rates and early signs of a stabilising residential property market. Potential green shoots include monthly positive price growth and robust auction clearance rates, albeit the supply of listings is low. The Portfolio’s underweight position detracted from relative performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-14.pdfFebruary, 2023
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -0.4% for the month ended 28 February 2023, outperforming the Australian equities market by 2.1% (S&P/ASX 300 Total Return Index). Within A-REITs, office outperformed whilst retail was in line with the benchmark and the diversified and industrial sectors underperformed.
Broadly, infrastructure outperformed real estate, with airports and tollroads outperforming utilities.
The best performing A-REITs included National Storage REIT (NSR), diversified GPT Group (GPT) and childcare landlord Arena REIT (ARF). A key underperformer was land lease developer Ingenia Communities (INA) which downgraded earnings guidance due to delayed development settlements stemming from wet weather and labour shortages. The Portfolio’s overweight positions in NSR and ARF contributed to relative performance whilst positioning in GPT and INA detracted.
February was dominated by earnings releases. Key themes to emerge from A-REIT results include:
• Earnings guidance was largely reaffirmed, or previous wide ranges tightened, owing to greater visibility on higher debt costs. Broadly, passive A-REIT earnings growth will be negative in FY23 due to higher debt costs overwhelming rent growth, and many face further headwinds into FY24.
• Comparable rent growth is strongest for industrial, self-storage, childcare and A-REITs with a high proportion of inflation-linked lease escalators.
• Balance sheet leverage remains moderate, with some exceptions. Interest rate hedging continues to be lifted, crystallising a higher cost of debt.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-13.pdfJanuary, 2023
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 8.1% for the month ended 31 January 2023, outperforming the Australian equities market by 180 basis points (S&P/ASX 300 Total Return Index). The Portfolio underperformed the S&P/ASX 300 AREIT Total Return Index (before fees).
Rising confidence that inflationary pressures have peaked led bond yields lower over the month. This buoyed the more interest rate sensitive and higher growth REITs such as fund managers. Within A-REITs industrial, fund managers and diversified were the strongest performing sectors whilst office, retail and self-storage underperformed. Broadly, infrastructure underperformed real estate with airports and toll roads outperforming utilities.
Newsflow was light in January in the lead up to profit result announcements in February.
Office landlord Dexus (DXS) provided an update on its acquisition of Collimate Capital’s (formerly AMP Capital) real estate and domestic infrastructure equity business. A delay in conditions being met on AMP’s side has resulted in the parties agreeing that the amount Dexus will need to pay will reduce by ~10% to $225m and the earn out fee potential to AMP will be forfeited. The Portfolio’s underweight position in Dexus contributed to relative performance.
Property fund manager Charter Hall (CHC) saw ~20% redemptions for one of its smaller office funds which had a 5 year liquidity event. Funds will be returned to investors progressively over 2023 as assets are sold. There have been increasing signs of equity flows into unlisted real estate funds pausing or reversing as interest rates have risen and listed REITs trade at deep discounts to private market real estate valuations. The Portfolio has a neutral position in CHC.
U.S. industrial REIT and portfolio holding Prologis (PLD) released a decent result with a conservative 2023 earnings growth guidance of 5.6%. Prologis suggested fundamentals remain healthy and expects 8-9% comparable rent growth, though occupancy is assumed to dip owing to rising supply deliveries. Of particular relevance to Australian industrial peer Goodman Group (GMG) which has significant development funds management earnings, Prologis highlighted that 2023 development starts will be 40% lower compared to last year with lower margins, as industrial values in the U.S. and Europe have fallen 7-16%. Interestingly, PLD reported that fund redemption requests have been modest to date. The Portfolio’s underweight position in Goodman Group detracted from relative performance whilst the Prologis position contributed marginally.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-12.pdfDecember, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -4.0% for the month ended 31 December 2022, underperforming the Australian equities market by 0.70% (S&P/ASX 300 Total Return Index). The Portfolio outperformed the index (before fees).
The Reserve Bank of Australia (RBA) raised the cash rate for the eighth consecutive month, with a lift of 0.25% to 3.10%, the highest level since 2012. With inflation remaining elevated. the RBA signalled further hikes to come. Australian 3rd quarter GDP slowed by more than ex pected but the labour market remains resilient with unemployment holding at 3.4%, the equal lowest since 1974. Within A-REITs, retail, self-storage, pubs and childcare were the strongest performing sectors whilst fund managers and industrial underperformed. Broadly, infrastructure outperformed real estate with utilities and airports outperforming, whilst toll roads lagged.
Several A-REITs released preliminary December 2022 independent appraisal property valuations. The devaluations reported were relatively modest and fell 1-2% on average. The steepest devaluations were reported by office and petrol station landlords. Some retail, industrial and childcare landlords reported positive property valuation uplifts.
Whilst appraisal capitalisation rates widened, pressured by higher interest rates, rent growth provided some offset to support valuations. Transactional activity has also slowed thereby limiting comparable evidence for valuers to utilise for benchmarking. It is likely that further property devaluations will eventuate in CY2023.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-11.pdfNovember, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 5.8% for the month ended 30 November 2022, underperforming the Australian equities market by 70bps (S&P/ASX 300 Total Return Index). The Portfolio underperformed the index (before fees).
The Reserve Bank of Australia raised the cash rate for the seventh consecutive month, this time by 0.25% to 2.85%, with further hikes expected. Positively, Australian headline inflation slowed to 6.9%, below expectations. The labour market remains strong with the unemployment rate ticking down to 3.4%, the lowest level in almost 50 years.
Within A-REITs, lower bond yields supported fund managers and residential developers to outperform, whilst retail, office and selfstorage underperformed. Broadly, infrastructure outperformed real estate with toll roads and utilities outperforming whilst airports lagged.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-10.pdfOctober, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 9.9% for the month ended 31 October 2022, outperforming the Australian equities market by 390bps (S&P/ASX 300 Total Return Index).
The Reserve Bank of Australia surprised as it raised the cash rate by 0.25% to 2.6%, lower than market expectations for a 0.5% lift. Australian headline inflation of 7.3% is the highest since 1990 and further interest rate hikes are anticipated.
Within A-REITs, self-storage, childcare, retail and diversified sectors outperformed whilst industrial and office underperformed. Broadly, infrastructure underperformed real estate but offshore airport and mobile tower holdings contributed to relative performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-9.pdfSeptember, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -13.6% for the month ended 30 September 2022, underperforming the Australian equities market by 730bps (S&P/ASX 300 Total Return Index).
Globally, inflationary pressures persisted and bond yields rose as the U.S. Federal Reserve raised interest rates by 0.75% and its projections implied a higher terminal rate. Locally, the Reserve Bank of Australia raised the cash rate by 0.5% for the fourth month in a row to 2.35%, the highest level since 2015, with further increases expected.
Within A-REITs, diversified, self-storage, office and retail outperformed whilst industrial, fund managers and childcare underperformed. In general terms, A-REITs with lower leverage and stronger inflation protection characteristics outperformed whilst growth-oriented A-REITs trading on higher valuation multiples underperformed. Broadly, infrastructure outperformed real estate.
After a busy financial results season in August there was limited stock specific news in September.
We have previously written about office landlord Dexus’ (DXS) acquisition of Collimate Capital’s (formerly AMP Capital) domestic real estate and infrastructure funds management platform. In a further blow to DXS, this month the investors in the $2.7bn AMP Retail Trust (ACRT) voted to transfer management of the fund to diversified landlord GPT. This is the third mandate the platform has lost in recent months with Collimate’s funds under management down from ~$28bn to ~$18bn. This loss reduces the price DXS will ultimately pay. Underweight positions in Dexus and GPT detracted from relative performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-8.pdfAugust, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -3.6% for the month ended 31 August 2022, underperforming the Australian equities market by 480bps (S&P/ASX 300 Total Return Index).
Globally, U.S. central bank commentary caused bond yields to rise. Locally, the Reserve Bank of Australia raised the cash rate again by 0.5% to 1.85%, the highest level since 2016, with further increases expected.
Within A-REITs, retail, diversified and self-storage outperformed whilst industrial and office underperformed. Broadly, infrastructure outperformed real estate. August was marked by financial results season.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-7.pdfJuly, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 11.8% for the month ended 31 July 2022, outperforming the Australian equities market by 5.8% (S&P/ASX 300 Total Return Index).
In response to elevated inflationary pressures and a tightening labour market, the Reserve Bank of Australia raised the cash rate again by 0.5% to 1.35% in July, with further increases expected. The Australian unemployment rate dropped to 3.5%, the lowest since 1974. Long-term interest rates fell, supporting A-REITs given their sensitivity to debt costs.
Within A-REITs, industrial, self-storage and childcare outperformed whilst retail, office and diversified REITs lagged. Broadly, infrastructure underperformed real estate.
Key news included earnings updates and property transactions. With respect to earnings updates, diversified REIT Stockland (SGP) announced the completion of the sale of its retirement business and upgraded its FY22 earnings guidance to the top end of its target range. The divestment of the retirement business will return SGP to a tax paying position as tax losses are utilised, which is expected to be a 5-10% headwind to FY23 earnings.
National Storage REIT (NSR) upgraded FY22 earnings guidance by 5% on the back of strong leasing outcomes evidenced by 21% growth in revenue per available metre of space. This growth was driven by a combination of higher occupancy and rental rates. The up graded earnings guidance reflects 24% growth on FY21.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-6.pdfJune, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -10.4% for the month ended 30 June 2022, underperforming the Australian equities market by 1.4% (S&P/ASX 300 Total Return Index).
In response to expectations of wages growth lifting amidst a tight labour market, the Reserve Bank of Australia raised the cash rate by 0.50%, sooner and higher than market expectations (and the first 0.50% rise since 2000). Within A-REITs, retail outperformed whilst diversified, office, industrial and property fund managers lagged. Broadly, infrastructure outperformed real estate, in particular toll roads where potential takeover activity may unfold. Key news included property revaluations, earnings guidance updates and transactions.
Starting with A-REIT property valuations, appraisal book values continued to rise over the period to June 2022. Childcare landlords reported the strongest valuation growth of ~5-8%, followed by industrial property valuations appreciating ~4-7%, nondiscretionary retail ~1.0-4.5%, office 0-2% and malls +2%. Interestingly, diversified landlord Growthpoint (GOZ) noted capitalisation rate expansion across its entire office portfolio, albeit a minor move, the first sign of this dynamic in the office sector for many years.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-5.pdfMay, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -8.6% for the month ended 31 May 2022, underperforming the Australian equities market by 5.8% (S&P/ASX 300 Total Return Index). In response to inflationary pressures the Reserve Bank of Australia raised the cash rate by 0.25% and for the first time since 2010, with further policy tightening expected over 2022. Similarly, the U.S. Federal Reserve continued its tightening with a 0.50% increase, the largest since 2000. The Australian Federal election resulted in a change of Government as the Labour party emerged victorious, though the implications for our sectors appear limited, with the exception of childcare which should benefit from a more generous policy.
Within A-REITs, retail and office outperformed, whilst diversified, property fund managers, residential and industrial lagged. Broadly, infrastructure outperformed real estate, in particular toll roads, electric utilities and airports. Key news included quarterly updates and transactions.
Starting with quarterly updates, industrial developer and fund manager Goodman Group (GMG) upgraded FY22 earnings growth guidance to 23% from 20%. GMG highlighted strong operating fundamentals and continued growth in its development pipeline to $13.4bn at attractive margins.
Weighing on global industrial REIT sentiment was e-commerce giant, and GMG’s largest tenant, Amazon flagging its intention to sublet excess U.S. warehouse capacity, after having doubled its footprint in recent years.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-4.pdfApril, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 0.7% for the month ended 30 April 2022, outperforming the Australian equities market by 1.5% (S&P/ASX 300 Total Return Index).
Globally, bond yields rose in April as higher inflationary pressures persisted, with Australia recording +5.1% headline inflation, the highest in more than 20 years. Consequently, the Reserve Bank of Australia (RBA) is expected to raise interest rates multiple times over 2022. Within A-REITs, industrial and office outperformed, whilst retail, self-storage, residential, and diversified lagged. Within infrastructure, toll roads and utilities outperformed whilst airports and rail underperformed. Key news included quarterly updates and transactions.
Diversified REITs Stockland (SGP) and Mirvac (MGR) issued quarterly updates in which they reaffirmed FY22 guidance for ~7% earnings growth. Both highlighted residential lot settlement delays because of supply chain disruptions and bad weather. Due to these same issues land lease community developer Ingenia (INA) downgraded its FY22 earnings growth guidance range to -8-4% from +3-6%, but maintained its mediumterm settlement guidance to 2024.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-3.pdfMarch, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 1.4% for the month ended 31 March 2022, underperforming the Australian equities market by 5.5% (S&P/ASX 300 Total Return Index).
The market continues to look at the implications of Russia’s invasion of the Ukraine, including the impact on various commodities. The U.S. Federal Reserve raised interest rates by 0.25% with rhetoric suggesting a steeper path forward as inflationary pressures persist but the impact to global growth remains unclear. In Australia the 10-year government bond yield increased by 70 basis points.
Within A-REITs, industrial and diversified outperformed, whilst retail and office lagged. Broadly speaking, infrastructure outperformed real estate.
It was a quiet month for A-REIT news. Key events included an equity raise and M&A related activity.
Office and self-storage landlord Abacus Property Group (ABP) raised $215m of equity, amounting to ~7% of issued capital, to reduce leverage, replenish investment capacity and fund the self-storage development pipeline. Pricing reflected a 5% discount to last close and 9% discount to Net Tangible Assets. Operationally, strong self-storage fundamentals were said to have continued into 1Q22.
In relation to M&A, property fund manager Charter Hall (CHC) announced its partnership with Dutch pension fund PGGM had entered into a scheme implementation agreement in relation to its previously announced proposed acquisition of the $1.6bn office and industrial REIT Irongate Group (IAP). The bid represents a 23% premium to Net Tangible Assets and has IAP Board support. CHC will own a 12% stake in the partnership and the remainder PGGM.
Moving to infrastructure, the New Zealand Government announced it plans to open borders several months earlier than previously targeted which is positive for the recovery in passenger volumes for Auckland Airport (AIA-NZ).
European tower owner and operator Cellnex (CLNX-ES), a portfolio holding, received regulatory approval from the U.K. regulator, the Competition and Market Authority, for the €3.7bn acquisition of CK Hutchison U.K. towers, subject to CLNX divesting c1,000 U.K. towers. CLNX also announced that it had divested 3,200 French towers to Phoenix Tower International as part of its €5.2bn Hivory acquisition.
Terna (TRN-IT), monopoly owner of the Italian electricity transmission network and a portfolio holding, presented its 2021-2025 business plan in which it expects to grow its regulated asset base by 7% pa, driven by €9.5bn of investments.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-2.pdfFebruary, 2022
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 1.5% for the month ended 28 February 2022, underperforming the Australian equities market by 0.6% (S&P/ASX 300 Total Return Index). Geopolitical tensions between Russia and Ukraine intensified throughout February, raising uncertainty and creating upward pressure on commodity prices such as oil and gold. In Australia bond yields also rose as market expectations for interest rates were brought forward.
Within A-REITs, retail and office outperformed, whilst diversified and industrial lagged. Broadly speaking, infrastructure outperformed real estate.
Key themes to emerge from earnings season include:
• The December 2021 half was impacted by COVID, most notably in retail via lower rent collections.
• Sector themes: more office and industrial development, more capital partnering initiatives, rising maintenance capex and tenant incentives, increased focus on interest rate hedging.
• Retail: mall occupancy remains resilient, leasing spreads are less negative, shoppers are more purposeful with visitation down but Christmas sales above 2019 levels. CBD retail is lagging. Grocery anchored retail remains resilient. Scentre Group (SCG) issued maiden 2022 dividend growth guidance of 5%.
• Office: vacancy and tenant incentives remain elevated though appear to be stabilising, uncertainty remains over tenant space requirements and higher quality buildings are outperforming. Numerous A-REITs intend to develop more supply. Dexus (DXS) reaffirmed 2% dividend growth guidance.
January, 2022
The S&P/ASX 300 AREIT Total Return Index produced a total return of -9.4% for the month ended 31 January 2022, underperforming the Australian equities market by 2.9% (S&P/ASX 300 Total Return Index). Global equity markets came under pressure as the U.S. Federal Reserve messaged it would increase interest rates in response to elevated inflation and favourable economic data. Bond yields rose and higher multiple growth-oriented companies underperformed. Within real estate, property fund managers and industrial REITs underperformed, whilst retail and office outperformed. Broadly speaking, infrastructure outperformed real estate. Key events during the month included merger and acquisition (M&A) activity, property transactions, management changes and company updates.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report-1.pdfDecember, 2021
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 5.2% for the month ended 31 December 2021, outperforming the Australian equities market by 2.6% (S&P/ASX 300 Total Return Index). The market continued to digest news emerging regarding the Covid-19 Omicron variant, which whilst more contagious, appears to be less severe in terms of health impacts.
Broadly speaking, infrastructure performed in line with real estate. Industrial, childcare and storage REITs outperformed whilst retail, office, residential and diversified underperformed. Key events for the REIT sector during the month included strong property portfolio revaluations, earnings guidance upgrades and in the broader real estate market, meaningful transactional activity. Starting with AREIT property valuations: Revaluations announced during the month were particularly strong for childcare, industrial, grocery anchored shopping centres, large format retail and self-storage. In these sectors revaluations ranged from high single digit to low double digit growth. Large malls and office buildings were the notable laggards.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Resolution-Capital-Real-Assets-Fund-Monthly-Report.pdfNovember, 2021
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 4.0% for the month ended 30 November 2021, outperforming the Australian equities market by 4.5% (S&P/ASX 300 Total Return Index). Broadly speaking, infrastructure underperformed real estate. Industrial and storage REITs outperformed whilst retail, office, residential and diversified underperformed.
Residential exposed REITs were impacted by various banks raising fixed rate home loans and expectations that the Reserve Bank might start tightening monetary policy as soon as next year which might adversely impact house prices. Starting with quarterly updates, retail landlords Scentre Group (SCG) and Vicinity Centres (VCX) noted that occupancy held broadly flat and whilst rent collection had been negatively impacted by lockdowns, visitation rebounded strongly as restrictions lifted. VCX noted that leasing spreads were still -7% but significantly improved from FY21. SCG also reaffirmed its dividend guidance.
In its update diversified group GPT noted that office vacancy remains elevated, but improved over the quarter with leasing success. Industrial occupancy improved and this part of the portfolio continues to grow via acquisitions and developments. Earnings guidance remains withdrawn as uncertainty regarding retail rent collection persists. New Zealand based Napier Port (NPH NZ) released its FY21 result in which earnings grew 6%, above guidance, supported by bulk cargo/log and container volume growth. FY22 guidance is for 10% earnings growth which assumes ongoing supply chain disruptions. The new wharf 6 project will complete in 2022.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/2111_PN25-A_UP_Factsheet.pdfOctober, 2021
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 0.6% for the month ended 31 October 2021, outperforming the Australian equities market by 0.5% (S&P/ASX 300 Total Return Index). This was despite a sharp rise in bond yields due to building inflationary pressures.Broadly speaking, infrastructure and utilities underperformed real estate. Retail and industrial REITs outperformed whilst office and diversified underperformed.
Starting with September quarterly updates, most A-REITs re-affirmed earnings guidance, while grocery-anchored retail landlords displayed resilience and issued maiden guidance given greater clarity on the resumption of trading subsequent to lockdowns in VIC and NSW. Key quarterly takeaways included residential sales momentum remaining positive, retail rent collection falling due to lockdowns, office occupancy was flat to down whilst self-storage occupancy rose
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/2110_PN25-A_UP_Factsheet.pdfSeptember, 2021
The S&P/ASX 300 A-REIT Total Return Index produced a total return of -1.9% for the month ended 30 September 2021, performing in line with the Australian equities market (S&P/ASX 300 Total Return Index). Broadly speaking, infrastructure and utilities outperformed real estate. Three takeover bids in recent months for Sydney Airport (SYD) and utilities Spark Infrastructure (SKI) and AusNet Services (AST) have buoyed infrastructure performance. Rising bond yields and a rotation out of “growth” stocks into “value” names saw retail and office REITs outperform diversified and industrial during the month.
The infrastructure sector was dominated by M&A activity. There are now three infrastructure companies under takeover bid – Sydney Airport (SYD), Spark Infrastructure (SKI) and AusNet Services (AST). Starting with SYD, the unlisted consortium led by IFM Investors increased their bid to $8.75 per share, ~6% higher than the opening bid. This implies ~27.7x 2019 underlying EBITDA. Consequently, due diligence was granted and, if a binding offer at $8.75 eventuates, the Board intends to recommend it.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/2109_PN25-A_UP_Factsheet.pdfAugust, 2021
The S&P/ASX 300 A-REIT Total Return Index produced a total return of 6.4% for the month ended 31 August 2021, outperforming the Australian equities market (S&P/ASX 300 Accumulation Index) by 3.8%.
Property fund managers have the strongest outlook for earnings growth, driven by transactional activity, development completions and performance fees. Charter Hall (CHC) has grown assets under management ~30% p.a. over the last three years and is guiding to FY22 earnings growth of 23%.
Industrial operating fundamentals remain strong, particularly in in-fill markets, and many A-REITs are increasing industrial exposure. COVID-19 has accelerated secular tailwinds with strong e-commerce activity driving tenant demand. Goodman Group (GMG) reported FY21 EPS growth of 14%, boosted by development profits, and provided FY22 earnings growth guidance of 10%. The development workbook has expanded by ~60% y/y to $10.6bn.
Office operating metrics are deteriorating with lower occupancy and elevated incentives resulting in negative effective rental growth. Few tenants are taking more space and obsolescence risk is rising. Despite this, pricing in the capital markets remains strong. Whilst several A-REITs, such as Dexus (DXS), are marketing older assets for sale many A-REITs, including GPT, Mirvac (MGR) and Stockland (SGP), intend to increase development. DXS reported FY21 underlying FFO growth of -4.1% but is guiding to FY22 dividend growth of 2%
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/2108_PN25-A_UP_Factsheet.pdfJuly, 2021
The S&P/ASX 300 A-REIT Accumulation Index produced a total return of 0.5% for the month ended 31 July 2021, underperforming the Australian equities market (S&P/ASX 300 Accumulation Index) by 0.6%. Infrastructure outperformed, mainly due to two companies receiving take-over offers. Toll roads underperformed. Take-over offers dominated infrastructure this month. COVID ravaged Sydney Airport (SYD) received a bid of $8.25/share from a consortium comprised of IFM, QSuper and Global Infrastructure Partners, representing a 42% premium to last close. This represents an equity value of $22.3bn and ~26x FY19 EBITDA. SYD is an excellent asset with a long-term concession and favourable light-handed regulatory regime, despite the uncertainty pertaining to the passenger recovery trajectory. The board has rejected the bid on the grounds of undervaluing the company and no due diligence was granted.
Electricity utility Spark Infrastructure (SKI) received three bids from a consortium comprised of KKR and Ontario Teachers Pension Plan. SKI owns minority non-controlling stakes in electricity distribution and transmission networks, as well as a solar farm. The initial bid was $2.70 per share, the second $2.80 and the third $2.95, all of which would be reduced by the interim dividend of $0.0625. The final bid values the equity at $5.2bn and represents a greater than 25% premium to undisturbed stock price and ~50% premium to the 2021 regulated and contracted asset base. SKI expects the asset base to grow ~7% p.a. to 2025, largely driven by transmission infrastructure investment connecting renewables into the grid. The consortium was granted non-exclusive due diligence
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/2107_PN25-A_UP_Factsheet.pdfJune, 2021
The S&P/ASX 300 A-REIT Accumulation Index produced a total return of 5.6% for the month ended 30 June 2021, outperforming the Australian equities market (S&P/ASX 300 Accumulation Index) by 3.3%. All infrastructure sub-sectors underperformed the A-REIT index. A-REIT sub-sector performance saw industrial and diversified companies outperform, whilst office, retail and self-storage companies underperformed.
Monthly A-REIT news spanned revaluations, operational updates, transactions and equity issuance. Starting with revaluations, a raft of REITs announced Jun-21 draft revaluations. Broadly speaking, revaluations rose mid-single digits across the sector over the half year. Industrial values rose the strongest, followed by long WALE assets including service stations, pubs and social infrastructure. Retail revaluations were mixed with large malls and CBD assets falling, whilst more resilient convenienceoriented neighbourhood malls and large format retail posted 5-10% gains. Office values rose low single digits, with longer WALE and suburban/fringe location offices outperforming. As a consequence of ~6% positive revaluations in 2H21 combined with net acquisitions, fund manager Charter Hall (CHC) reporte d that its funds under management has grown 28% over FY21 to $52bn.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/2106_PN25-A_UP_Factsheet.pdfMay, 2021
The S&P/ASX 300 A-REIT Accumulation Index produced a total return of 1.8% for the month ended 31 May 2021, underperforming the Australian equities market (S&P/ASX 300 Accumulation Index) by 0.5%. All infrastructure sub-sectors underperformed the A-REIT index.
A-REIT sub-sector performance saw industrial and office names outperform, whilst retail landlords, such as Vicinity Centres (VCX), underperformed. Monthly news spanned quarterly updates, earnings upgrades, equity issuance and transactional activity. Starting with quarterly updates, industrial landlord Goodman Group (GMG) reaffirmed FY21 earnings growth guidance of 12% and continues to point to solid operating conditions, strong investor demand and land intensification opportunities in its urban infill markets. Consequently, the development pipeline has expanded to $9.6bn and will likely exceed $10bn by mid-2021. Retail landlord Scentre Group (SCG) released an update reaffirming CY21 distribution guidance. Operationally, footfall was 93% of 2019 levels, occupancy remained at 98.5% and total quarterly sales were broadly in line with 2019 levels whilst specialty sales were 0.6% below.
SCG’s peer VCX released a less positive update in which it highlighted that occupancy remained at 98% but leasing spreads deteriorated to -13.5% and total quarterly sales were 7% below 2019. Footfall was 77% of 2019 levels, impacted by CBD assets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/2105_PN25-A_UP_Factsheet_May-2021.pdfJanuary, 2021
The S&P/ASX 300 A-REIT Accumulation Index produced a total return of -4.1% for the month ended 31 January 2021, underperforming the Australian equities market (S&P/ASX 300 Accumulation Index) by 4.4%. The infrastructure sector slightly outperformed the A-REIT index. Particularly, Spark Infrastructure (SKI) performed strongly, whilst data centre company NEXTDC (NXT) underperformed.
Within the A-REIT sector this month industrial landlords underperformed, followed by office, while retail was more resilient. During the month diversified REIT Stockland (SGP) performed strongly, reversing the underperformance of the previous month. The Housing Industry Association (HIA) reported that December was the second strongest month of new home sales in the 20 years of their survey, only exceeded by March 2001. In December new home sales nearly doubled compared to the number of sales recorded in November. Sales during the December 2020 quarter were 48.7% higher than the September 2020 quarter. In addition to strong residential sales volumes, house price appreciation forecasts by commentators continue to increase. Both factors are positive for Stockland’s residential development segment.
For the remainder of the A-REITs, there was relatively little company specific news in January, ahead of results in February. Shopping centre REIT Vicinity Centres (VCX) announced a net valuation decline of 4% or AU$570m for the six -month period ending 31 December 2020 for its 60 directly owned retail properties. This follows an 11% devaluation in the previous six-month period. Income degradation and assumptions including probable higher incentives drove the bulk of the devaluation, along with minimal tourism and low office occupancy. Centuria Office REIT (COF) completed external valuations on half its investment portfolio, reporting a slight 0.8% reduction in valuations over the six months to 31 December. During the month Dexus (DXS) continued its on market share buyback. The company is currently the only A-REIT actively buying back shares. European listed retail REIT Unibail-Rodamco-Westfield (URW) completed the disposal of the SHiFT office building in Paris for €620m. The proceeds will be used to reduce leverage. The stock performed relatively strongly during the month, largely driven by short covering at the end of the month, following news of retail investors targeting heavily shorted stocks. For toll road owner Atlas Arteria (ALX) traffic flows in France, which recovered strongly in Q3, was again affected in Q4 2020, albeit to a lesser extent, by movement restrictions implemented in November in response to a second wave of COVID-19. Heavy vehicle traffic was less affected by the imposition of lockdown measures than light vehicles, falling by only 2.1% in Q4 2020 compared with 2019.
Overall revenue in France was down 18% in quarter compared to last year.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/RERCCP_factsheet_January-2021.pdfasset_class: Property and Infrastructure
asset_category: Australian Listed Property
peer_benchmark: Property - Australian Listed Property Index
broad_market_index: ASX Index 200 A-REIT Index
manager_contact_details: Array
ticker: WHT0014AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://rescap.com/realassetsfund
REPORTS
Latest Monthly Report
fund_features:
The Resolution Capital Real Assets Fund was previously known as the Resolution Capital Core Plus Property Securities Fund. The Fund aims to exceed the total return of the Benchmark after fees on a rolling 3 year basis. It gives Investors access to a professionally managed portfolio of Australian listed real estate, typically known as A-REITs, and Australian listed infrastructure investment securities. The underlying assets of the investments include commercial real estate assets such as office buildings, shopping centres and logistics warehouses as well as infrastructure assets such as airports, pipelines, toll roads and public utilities. Resolution Capital seeks to further enhance returns by investing up to 20% of the Real Assets Fund in global real estate and infrastructure securities listed on international stock exchanges. The Fund invests primarily in Australian Real Estate Investment Trusts (‘A-REITs) and real estate securities (minimum of 50% of the portfolio), but also has the ability to invest in Australian listed infrastructure securities (‘ALI’) and up to 20% in global listed real estate and infrastructure securities (global portion).
structure: Managed Fund