Global risk assets reversed some of their year-to-date negative performance. Bond yields fell over the month, with investors believing that central banks’ hawkish responses are likely to have a deflationary impact. Unsurprisingly, Pan European real estate equities had a very strong month, with the Trust’s benchmark returning + 9.5%. The same index, when viewed in euros, rose +12.4%.Continue reading
A difficult May was followed by a terrible June for real estate equities. Investors decided that inflation hadn’t peaked (a hope in May) and that central banks’ policy response would be more aggressive than previously expected as they seek to bring inflation under control. The result was a rapid widening in bond spreads (the difference in yields between different bonds), a steepening of the front end of the yield curve (a widening of the spread between short and long-term bonds) and the pricing-in of a consumer driven recession as mortgage costs rise despite high levels of employment. Our benchmark, FTSE EPRA/NAREIT Developed Europe (total returns, in sterling terms) fell -14.8% and the net asset value fell -15.0%. The bright spot was the share price, which was down ‘only’ -7.2%.Continue reading
Pan European property equities (FTSE EPRA Nareit Developed Europe total returns, in sterling terms) returned -3.1% and underperformed broader equities, which were almost flat during May but demonstrated significant intra-month volatility. The Trust’s net asset value (NAV) fell slightly less at -2.9% but the share price was hit harder and fell -7.7% over the month. This pushed the discount to NAV out to -9%.Continue reading
Whether you believe inflation is demand or supply driven, it is here and the central banks’ actions are adding to market volatility.
In this video, Marcus Phayre-Mudge, Fund Manager of TR Property Investment Trust plc, will examine not only the income characteristics of property but also how The Trust is exposed to those parts of the real estate environment that are still enjoying the effects of structural tailwinds, index-linked income and a shrinking supply of new development as building cost inflation bites.