Real Estate Global Real Estate Strategy – Screening for value amid the sell off

Global Listed Real Estate fell 42% to a trough last week, and has since recovered 20% as attention turns to the sector's financial leverage, and mass lockdowns call into question the resilience of rents and dividends.

02 Apr 2020

Year-to-date performance by sector

Source: UBS;Datastream;FTSE EPRA NAREIT. As of 31-March-2020

Sector drops 28% as attention turns to leverage, liquidity and covenants 

Global Listed Real Estate fell 42% to  a trough last week, and has since recovered 20% taking YTD performance to -28%. It has underperformed the market (which is down 21%), as attention turned to the sector's financial leverage, and mass lockdowns and store closures call into question the resilience of cash flows. Dividends are now being cut, predominantly in the retail names. Our discussions on the impact are now broadening away from just retail.

Month in review – Non-REITs outperform REITs; Industrial top sector

Listed global real estate returned (-22%) in March, underperforming Equities (-13%). Non-REITs (-16%) outperformed REITs (-24%). Industrial (-7%) and Residential (-18%) were the best performing sectors. Retail (-39%) and Hotels (-38%) performed the worst. By region, Hong Kong (-10%) and Singapore (-19%) outperformed, while Australia (-42%) and the US (-24%) underperformed, in USD.

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