In the U.S.:
- In a mad scramble to repair the situation in Syria, US Vice President Pence and Secretary of State Pompeo were able to secure a 120 hour ceasefire from Turkish President Erdogan to enable the safe evacuation of the Kurds. The move by the US President Trump to remove forces from the region has drawn backlash from both political parties and may put him in a weaker position as the impeachment probe intensifies.
Columbia Property Trust (CXP) announced that it has signed an agreement to acquire Normandy Real Estate Management, LLC, a leading developer, operator and investment manager of office and mixed-use assets in New York, Boston, and Washington, D.C. for approximately $100M. The transaction is expected to close by year end 2019.
- According to Reuters, a Ministry of Commerce spokesman stated that Chinese officials are working on the text of an agreement on trade with US negotiators and are striving to reach an agreement as soon as possible. There was no mention of a “phase one” deal and China reiterated that they wanted all tariffs lifted.
- Q3 GDP growth slowed to a 27yr low of 6.0% y/y versus Q2’s 6.2% reading. GDP grew 6.2% YTD, putting it at lower end of government’s 6.0-6.5% target for 2019.
- September core inflation fell to 0.3% y/y from August’s 0.5% y/y reading. The lackluster inflation result was the lowest since April 2017, driven predominantly by weaker fuel costs. The reading will likely intensify calls for further easing before the BOJ’s October policy meeting.
Sun Hung Kai Properties decided to provide a little reprieve to mall tenants being affected by protest closures. Sun Hung Kai will cut rents and other fees and continue to implement various measures to boost the business environment for its tenants during the protests.
- The UK and EU reached a Brexit deal after an earlier setback saw DUP reject proposals on issue of consent, customs and VAT. It is now up to UK PM Johnson’s government to secure the 318 votes needed in parliament before Saturday’s official vote.
SEGRO Plc provided its 3Q19 trading update this week. CEO David Sleath commented that “the third quarter has seen another period of strong operational delivery from SEGRO.” While uncertainty surrounding Brexit persisted throughout the quarter, SEGRO has continued to experience good demand for its urban warehouse and big box logistics portfolio that is located in both the UK and Continental Europe. The company continued to capture reversionary potential within its portfolio with new headline rents on rent reviews and lease renewals approximately 20% higher than the previous passing rents for the nine months ended September 30, 2019. Portfolio occupancy remained stable at 4.9%. Year to date the company has completed 765,900 sqm of new developments that are 88% leased. The current pipeline of active developments totals 644,000 sqm of which 63% has been preleased with a projected yield on cost of approximately 7%. The balance sheet remained well positioned to support further development led growth for the company with a pro forma LTV of 27% as of quarter end.
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.