Performance as at 30 June 2021
Performance is after the annual fund charge, and before tax and membership fees (if applicable). For more information, see legal information and disclaimers.
What happened this quarter (3 months to 30 June 2021)
- International property markets delivered a solid return during the second quarter, as the gradual reopening of various economies around the world continued to benefit a sector hit hard by strict lockdown measures in the wake of the COVID-19 pandemic.
- Most regions – with the exception of Singapore – delivered gains over the quarter. The US, Canada and Europe were the better performers, as the vaccination roll-out continued at pace and allowed local lockdown restrictions to ease further. At a sector level, Self-storage was one of the better performers, while Healthcare also did well. Hotels and Office were the weakest performers – the latter being impacted by continued uncertainty over a return to work, highlighted by a slower-than-expected recovery in office occupancy levels.
- While the fund delivered strong performance in absolute terms, holding back relative performance was poor allocation to Diversified Real Estate Activities, and company selection within Real Estate Operating Companies and Retail Real Estate Investment Trusts (REITs). At a company level, holdings in Mitsubishi Estate Company and Scentre were a drag on performance. Mitsubishi Estate, Japan’s largest real estate developer, fell on the back of the weak performance of the Japanese share market overall. Meanwhile, Scentre, an Australian shopping centre company, struggled against a backdrop of weaker-than-expected Australian retail sales.
- Benefiting performance was the fund’s allocation to Specialised REITs and Residential REITs, as was company selection within Healthcare. The fund’s holdings in Invitation Homes, CubeSmart and Equinix were notable contributors. Invitation Homes, the largest owner of single-family rental homes in the US, saw its share price increase by 17% as the company is geared to the recovery in the US housing market. CubeSmart, a US real estate investment trust that invests in self-storage facilities also did well, benefitting from its focus on the New York market, where demand outstrips the supply of storage facilities. Meanwhile data centre REIT, Equinix, benefitted from large-scale buying of the company’s shares as it entered the index.
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