In the U.S.:
- The US government shutdown continued this week with federal workers set to miss their first paycheck of the year. Due to the lack of progress in resolving the conflict through diplomatic means, the White House is considering declaring the southern border a national emergency to divert the $5.6B requested for the border wall from either the pentagon or FEMA.
- The FOMC minutes released showed that a few of the members were reluctant to raise rates due to the lack of inflationary pressure. The minutes give the impression that the Fed will be more patient and cautious as it raises rates this year.
JBG Smith (JBGS) reported the sale of the Warner Building in Washington DC to CBRE Global Investors for $376.5M. JBG Smith had 55% interest in the building and plans to use the proceeds to deleverage their balance sheet and create capacity for future investment opportunities.
- Trade talks with the U.S. seem to be progressing well following the three day trade meeting. Although light on details, the two sides expressed optimism for a trade resolution and scheduled another meeting where Chinese Vice Premier Liu He will visit the US Trade Representative Robert Lighthizer in Washington later this month for higher level talks.
- November household spending fell by 0.6% y/y versus October’s 0.3% y/y decline. The reading fell for the third straight month and makes it more difficult for the BoJ to reach its 2% inflation target.
Mitsui Fudosan Logistics Park to raise up to ¥33.2B in share sale. The company plans to use the proceeds for the acquisition of properties in Japan.
- November German industrial output unexpectedly fell by 1.9% m/m versus October’s revised 0.8% m/m decrease. Lower output of consumer goods and energy were cited as the main catalysts to the drop in output.
- UK PM Theresa May battles for support ahead of next Tuesday’s Brexit vote. PM May held talks with Unite union leader Len McCluskey and has reached out to a small group of Labour MP’s in order to build cross party support. It has also been reported that PM May’s team are preparing for alternatives should the vote fail.
Safestore Holdings, a self-storage operator focused on the UK and Paris metro markets, reported it fiscal year results this week for the 12 months ended October 31, 2018. EPRA EPS of 26.8 pence/sh was a 15.5% increase y/y and towards the upper end of the range of analyst estimates. Like-for-like revenues increased 5.2% on a constant exchange rate (CER) basis, +5.2% in the UK and +5.1% in Paris. The increase in revenues was largely driven by higher occupancies with a slight increase in storage rates. The final dividend for the year brought the full year dividend up to 16.25 pence/sh, a 16.1% y/y increase. The balance sheet ended the year in strong position to support future growth with a LTV of 30%.
The views expressed in this update are as of the date of this blog entry. These views and any portfolio holdings discussed in the update are subject to change at any time based on market or other conditions. The adviser disclaims any duty to update these views, which may not be relied upon as investment advice. In addition, references to specific companies’ securities should not be regarded as investment recommendations or indicative of the Adelante products, strategies, or portfolios.