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Sarasin IE Sustainable Global Real Estate Equity (USD) - News
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Fund Name Changed
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Tuesday, 22 November 2016
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Official Announcement
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The Sarasin IE Sustainable Equity - Real Estate Global (USD) will change it's name to Sarasin IE Sustainable Global Real Estate Equity (USD), effective from 22 November 2016
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Sarasin Sustainable Eqt RE Glb $ comment - Dec 15
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Friday, 11 March 2016
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Fund Manager Comment
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Australia was the strongest market for global listed real estate in Q4, and one of the portfolio’s top contributors, benefiting from an Australian dollar rebound and strong performance by rallying residential names Mirvac and Stockland.
The US was the sector’s second strongest market, and the portfolio’s largest positive contributor, driven by stock selection. Our names performed strongly relative to their sector peers, largely due to solid Q3 results. Our lack of exposure to the unloved hotels sector, and limited exposure to healthcare (also weak), benefited the fund too.
Singapore stock selection was a significant positive contributor for the fund, thanks to the quarter’s top performer for the fund, Capitaland, which rebounded after a large sell off created by Chinese uncertainty in Q3. Hong Kong stock selection was also helpful, driven by MTR Corp (landlord and transport operator).
Elsewhere, Canada was listed real estate’s weakest market, followed by the UK. Both suffered at the hands of weak currencies. Canada also had to contend with a continued oil price falls, while the UK saw some post-results season profit taking.
In Japan, developer Mitsui Fudosan was weak on the back of a construction scandal, but Daiwa (a significant overweight in the portfolio) witnessed strong results and increased expectations. Europe was a mild detractor for the fund due to a downgrade on Unibail-Rodamco.
The global listed real estate sector remains attractive, at a discount to its underlying net asset value. Volatility in the sector is far more likely to stem from market sentiment rather than from the fundamentals of this asset class; markets should return to focus on these fundamentals once any noise has quietened.
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Sarasin Sustainable Eqt RE Glb $ comment - Sep 14
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Monday, 20 October 2014
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Fund Manager Comment
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The US remained an economic bright spot throughout much of the third quarter, though the Federal Reserve is still expected to start hiking interest rates only around mid-2015, and Chair Janet Yellen continues her labour market focus. In Europe, meanwhile, despite a disappointing take up of TLTROs (targeted longer-term refinancing operations), Mario Draghi claimed that the European Central Bank remained ready to deploy more unconventional monetary policy in the face of weak data and entrenched deflation. Elsewhere, politics held centre stage through the Scottish independence referendum's 'No' vote in the UK, and anti-China protests in Hong Kong.
Hong Kong was the strongest local market over the quarter, and our exposure to Swire Properties, MTR Corp and Sun Hung Kai helped the fund. Although Japan was one of the weakest real estate markets on a regional basis, stock selection there paid off through our highest contributor Daibiru Corp. Demonstrating the continued strength and depth of money chasing prime real estate assets, Boston Properties (the largest office REIT in US) sold a 45% stake in three class A Manhattan/Boston office buildings, with the assets valued at more than $4bn.
Europe was the weakest market on a regional basis, which was reflected in underperformance in a number of our European names.
We used a surprise equity issuance to increase our position in Hammerson. This issuance was not initially taken well by investors, but is helpful for the company in buying out its 40% joint venture partner at Highcross in Leicester for £180m, investing a further £30mn in the highly profitable Value Retail, and £70m in a new venture (Via Outlet Fund).
We remain cautiously optimistic on the outlook for property. While a change in interest rate expectations could lead to some short-term volatility in the listed real estate sector, real estate fundaments continue to be strong, with high quality underlying assets and significant interest from cash buyers for prime assets keeping pricing firm.
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