Category Archives: Factsheet

In summary, over February, investor sentiment was driven by macroeconomic events alongside a handful of corporate events (within our small real estate world). The second half of February was, clearly, dominated by the tragedy unfolding in Ukraine. This historical and terrible geo-political event essentially added huge uncertainty to the backdrop of inflation-averse central bank behaviour. Across the globe, we saw risk assets accelerate their declines as markets absorb the multiple threats to economic growth.

Real estate stocks were not immune from the weakness in global equities as the new year got underway. The expectation of US Federal Reserve policy tightening has now become a reality. This news was coupled with firm indications that the world’s most important central bank is not concerned about short term (downward) adjustments to risk asset pricing; this is not their priority. This confirmation of market expectations impacted highly rated ‘growth’ stocks more than ‘value’ companies, and real estate (while a leveraged asset class) sits more in value than growth (with a handful of exceptions). As a result, the Trust’s benchmark fell ‘only’ -3.6% whilst Nasdaq was down – 9% in the month.

December brought a strong end to the calendar year with the net asset value (NAV) rising +1.8%, while the benchmark rose 0.6%. The share price gained 2.7% over the month, which brought the share price total return for the year to 23.5%; this reflects both the 18.6% growth in the NAV over 12 months and the discount (price/NAV) narrowing to less than 1%. The narrowing discount reflects an increased appetite for (relatively) high yielding real assets, which offer the potential for inflation protection – particularly where the underlying income is index-linked. We expect this theme to continue into 2022.

November was a positive month for real estate equities, and the FTSE EPRA/Nareit Developed Europe TR Index (in sterling) rose +1.1%. The trust’s net asset value (NAV) total return was just behind at +1.0%. In fact, the real estate sector was the third strongest among all the global industry classifications, with the Europe-wide STOXX 600 falling -2.5%. The month began strongly with our sector continuing its rally from October; this was driven by dovish commentary from both the Bank of England (no base rate increase at its November meeting) and the European Central Bank. Sector darlings such as logistics, industrial and self-storage performed well alongside the most leveraged group (Swedish stocks), which have been much discussed in previous monthlies. The latter part of the month saw news dominated by Covid-19’s new variant, which led to considerable price retrenchment among retail and hospitality focused companies; this was despite many shopping centre owners reporting footfall close to, or at, pre-pandemic levels.

Pan European real estate equities enjoyed a healthy recovery after the weakness seen in September. The Trust’s net asset value (NAV) rose +4.4%, while the benchmark gained +3.7%. The share price didn’t quite keep up with the NAV and rose +3.6%. Continental European real estate equities performed strongly and collectively rallied +5.5% in euro terms. Meanwhile, UK companies gained +3.6% in sterling terms.