November 2012

By | 16th December 2012

Pan-European property shares had another positive month, the benchmark index, FTSE EPRA/NAREIT Developed Europe TR Net Index (in GBP) rose 2.4% bringing the year-to-date figure to 22.6%. However, it was certainly a tale of two halves with the index falling 4.2% in the first two weeks of the month only to rise 6.9% in the remaining fortnight. With the US presidential election out of the way, investors focused their concerns on the ‘fiscal cliff’ and the risk of bipartisan gridlock amongst lawmakers in Congress. However, subsequent economic data from both the US and China relieved some concerns and markets climbed once again.

Within the property sector, it was the Eurozone countries which outperformed the UK, Switzerland, Sweden and Norway. Austrian stocks rose 9.1% with both CA Immo and Conwert posting impressive gains. Germany rose 3.5% and French stocks were up 3.8%. The UK was a relative underperformer (+1.4%) in the month but remains an outperforming geographical region this year. At the stock level, St Modwen rose 8.2% on an upbeat trading statement and Helical Bar 16.2% on its interim results and positive news on its London centric development portfolio. The Swedish stocks remained lacklustre – partially on the continued fears around the tax issues (covered last month) but also the announcement of further layoffs in a number of industries. Swiss stocks performed poorly as expected in a rising market where they are seen as defensive plays. However they continue to trade at premiums to NAV and SPS took the opportunity to raise 10% new equity in a rights issue at the CHF 64 NAV versus a closing price of CHF 74. This stock remains a significant underweight in the fund and the resulting price weakness helped relative performance.

The interim dividend announced on 22nd November was 2.65p, a 10% increase on last year. The ex date is 5 December.

On 26 September, the Board of TRPIT announced a proposal to convert Sigma shares into Ordinary shares, creating a larger, more liquid Investment Trust with a single share class. The offer reflects a discount to Sigma’s net asset value after costs and the Board recommends that holders of both share classes vote in favour at the EGM (December 14th) or by proxy. The Circular and proxy forms were circulated with the Interim results. Any investor requiring more information should contact their TRC sales contact or the Trust’s management team directly.

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