Pan-European real estate equities enjoyed a solid month. The Trust’s net asset value (NAV) increased by 2.5% in November, while the benchmark rose 1.4%. At the regional level, the UK and Europe (in local-currency terms) performed almost identically, with the UK up 2.4% and continental Europe up 2.5% in euro terms.

Pan European real estate equities experienced a broad range of returns in October. Macro forces again dominated. The UK Parliament finally managed to agree on one thing – the date for the General Election. Currency markets took the reduced likelihood of a ‘no-deal’ Brexit positively and GBP strengthened 2.9% versus EUR over the month. GBP has now strengthened over 8% from the mid August lows.

The return to work following the summer holiday period has seen a continuation of the strong recovery (from the mid August lows) of UK property companies share prices. Whilst the overall pan European benchmark returned 2.29% (in GBP terms), the UK contributed 6.88%. This dramatic recovery means that the UK names have almost matched the performance of their Continental counterparts over the first six months of the Trust’s financial year (March -September) when viewed in local currency terms.

On the face of it, an encouragingly positive month for pan European real estate equities with the Trust’s benchmark returning +2.73%. Continental property shares steadily rose over the month (+3.5%) with a large number of outstanding individual performances (13 companies returned more than 10% in the month with just 2 from the UK). However, the UK was much more a rollercoaster with the group down -3.2% by the middle of the month before recovering to finish +2.3%. The culprit continues to be politics and the risk of a ‘no deal’ or hard Brexit initially drove investors away from UK domestic stocks. Real estate names are a disproportionately large constituent of any ‘Brexit basket’ given their almost entirely domestic earnings profile. The recovery in UK equities in the second half of the month surprised us but probably reflected the hard line which the new Prime Minister is taking with his critics and the EU. Some investors perceive an opportunity for an improved negotiation with the EU given the real risk of a ‘no deal’ exit. At the very least, markets sense an end to some of the unknowns with events moving quickly over September.

Pan European real estate equities returned a respectable +2.1% when viewed in GBP but a more paltry +0.5% when measured in EUR. This was clearly a consequence of the weakness of GBP following the new Prime Minister’s sabre rattling (and Leave dominated new Cabinet) and the increased risk of a ‘no deal’ Brexit. TR Property’s NAV rose +2.73% in the month, the share price also rose +2.7%.