In the U.S.:
- August CPI rose 0.2% m/m which was unchanged from July’s reading. Increases in gasoline and rents were offset by declines in healthcare and apparel costs.
Columbia Property Trust (CXP) and Normandy Real Estate announced the development of a boutique office building at 799 Broadway in NY. Columbia will own 50% of the $300M ground-up project, which is scheduled to be completed in 2H 2020.
- August industrial production improved to 6.1% y/y versus July’s 6.0% y/y reading. The slight uptick in production was attributed to a pickup in coal, cement and electricity production.
- Bloomberg reported that US President Donald Trump ordered his aides to proceed with $200B in China tariffs despite having reached out for talks. The move undercut his senior officials and signaled his desire to continue pressuring Beijing even though there are no signs that the pressure will work.
- Japanese Prime Minister Shinzo Abe stated that the central bank’s ultra-easy monetary policy should not continue forever. The remarks highlighted that the administration is becoming more open to the idea of a gradual withdrawal of monetary stimulus.
A Moody’s article predicts that the J-REIT market bubble could burst after 2020. The article noted that J-REITs would likely increase property purchases for the next two years, amid low and declining yields, to boost their assets.
- BoE Governor Carney warned that the “no-deal” Brexit scenario could lead to economic chaos, an increase in unemployment, a rise in inflation, and a fall in property prices by up to 35% over three years. Carney highlighted that the BoE would not be able to cut interest rates in the “no-deal” scenario as it would further raise inflation.
- The Turkish central bank hiked rates by 625bps in a bid to save the currency, which was down ~40% ytd. The move demonstrated the central bank’s independence as it defied the wishes of President Erdogen, whom is locked in a political fight with the US.
UK listed self-storage operator Safestore Holdings Plc reported a favorable third quarter trading update this week. Like-for-like revenues increased 5.6% YOY on a constant exchange rate (CER) basis with strong performance in its two markets – UK up 5.9% and Paris up 4.3%. Occupancy gains were the primary driver of revenue growth with the closing occupancy in the like-for-like portfolio increasing 330 bps, while the average store rate was up 0.5% on a CER basis. Meanwhile, UK peer Big Yellow Plc issued new shares this week to raise ≈ £67 mn of gross proceeds to partially fund its development pipeline and for other general corporate purposes. In conjunction with the placement, Big Yellow provided a brief update of operations for August that confirmed relatively healthy operating conditions as well.
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.