Performance as at 31 December 2020
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 31 December 2020)
- International property markets finished 2020 on a high note, with most global property indices recording double-digit gains as the COVID-19 vaccine rollout raised hopes of a strong economic recovery. Still, it was a challenging year for the property sector, with the COVID-19 pandemic seeing retail and office companies underperform as stay-at-home measures weighed on these businesses.
- During the quarter, US real estate investment trusts (REITs) reported earnings that showed retail and hotels continued to struggle due to the pandemic. Meanwhile logistics, medical offices, data centres and cell towers – for the most part – posted solid numbers, confirming growing demand for leasing and accelerating developments.
- In Australia, office REIT Dexus sold a 50% interest in Grosvenor Place, Sydney for A$925 million. The sale price represents a 4.9% net yield and a 5% discount to book value. One challenge Grosvenor Place will face is that 60% of its leasing contracts are due to expire over the next three years.
- Also in Australia, GPT Group announced it had entered into a binding agreement with the APPF Commercial Fund to sell its 25% share in office building, 1 Farrer Place in Sydney for A$585 million. The company said proceeds from the sale will be reinvested into logistics acquisitions and the Group’s development pipeline.
- Elsewhere, Ashford Hospitality Trust appeared to avoid bankruptcy plans in early 2021 when it secured a US$350 million loan facility with Oaktree Capital Management. The company will pay 16% interest in the first two years of the loan, 14% in the third, plus exit fees that could bring the total payback cost to nearly US$600 million.
- Finally, in November, shareholders of Paris-based Unibail Rodamco Westfield rejected the proposed €3.5 billion equity raising, as the 62% of votes in favour did not meet the required two-thirds majority after activist investors led a campaign to reject the recapitalisation plan.
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