In the U.S.:
- The Mueller report on Russian collusion, released last weekend, showed no apparent link between the Trump organization and Russia. The question of obstruction of justice was left up to AG Barr, whom exonerated the president from the charge. Although many fights regarding the release of the full report are ongoing, the report was seen as a win for the Trump administration.
Cousins Properties (CUZ) and TIER REIT (TIER) entered into a merger agreement to combine in a 100% stock transaction. Under the terms of the agreement, Cousins will issue 2.98 shares of newly issued common stock in exchange for each share of TIER stock. Following the transaction the newly formed company will trade under the Cousins Properties name and CUZ ticker symbol.
- Trade talks with US Treasury Secretary Steve Mnuchin and USTR Robert Lighthizer concluded with both sides claiming that the talks have been constructive. As usual, reporting has been light on details but sets the stage for constructive talks to continue next week when Vice Premier Liu He visits Washington. The news follows comments White House economic adviser Larry Kudlow said to Bloomberg stating that the US was willing to negotiate for weeks or even months.
- February industrial production rose 1.4% m/m versus January’s 3.4% m/m decline. The uptick in production was welcome news as Japan has been struggling with demand lately due to the US/China trade war.
Another residential site at the former Kai Tak airport was won by a Wheelock Consortium for HK$9.9B. The consortium consists of Henderson Land Development, Wheelock Properties, New World Development and China Overseas Land & Investment.
- Protests have erupted outside UK’s parliament following PM Theresa May’s third Brexit defeat. Following the vote, the EU has called an emergency summit for April 10th as the possibility of a no deal Brexit grows.
Deutsche Wohnen, Germany’s second largest listed residential property company, reported its 2018 FY results this week with FFO 1/sh. of €1.35/sh., an increase of 10% YOY and roughly in line with guidance. Like-for-like rental income increased 3.4% for the year, +3.6% in the Greater Berlin market where ≈ 70% of its units are located. At year end, portfolio vacancy was 2.1%, while the reversionary rent potential of the portfolio was ≈ 30%. Total portfolio value increased 11% on a LFL basis, while EPRA NAV increased 18% for the year to end at €42.26/sh. The year-end LTV was at 36%, towards the low end of the target range of 35% – 40%. Initial guidance for 2019 assumed LFL rental growth of 3% and FFO 1 of ≈ €535 million, an increase of 12% versus 2018.
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.