In the U.S.:
- June headline CPI up 0.1% m/m versus May’s 0.1% rise. Increases in shelter and used cars offset declines in energy, recreation, airline fares, and personal care.
Digital Realty Trust, Inc. (DLR) announced it has closed on the acquisition of a 3.5-acre land parcel located in Ferriers-en-Brie, east of Paris for $6.9M. With the building permits already in place, Digital Realty will immediately commence construction on a new 12-megawatt data center.
- June exports fell 1.3% y/y versus May’s 1.1% y/y increase. The reading was concerning given that this was the first full month of the higher US tariff rate.
- Trade talks took a step back this week, after the US disclosed its displeasure that China had not been keeping its promise to buy more American agricultural products and the inclusion of a hard liner, Commerce Minister Zhong, in trade talks with USTR Lighthizer and US Treasury Secretary Mnuchin.
- South Korea’s President Moon Jae-in stated that countermeasures to restrictions on exports of semiconductor materials from Japan are being prepared. In addition, Russia has demonstrated a willingness to provide South Korea with the semiconductor materials necessary to complete production. If a tool change to Russian materials occurs, there is a retooling and testing period that must occur before production resumes, which could squeeze semiconductor prices higher in the short term.
Ascendas India Trust invested S$42.1M to fund the construction and acquisition of a warehouse near Navi, Mumbai. The 325K sq. ft. warehouse is located at Arshiya Free Trade Warehousing Zone.
- May Eurozone industrial production was much better than expected, expanding 0.9% versus April’s revised 0.4% drop. The biggest gains were in capital goods production, followed by consumer durables and non-consumer goods.
- The NYT reported that the Trump administration would investigate (under Section 301 of Trade Act of 1974) whether France’s plan to impose a 3% tax on leading American technology firms amounted to an unfair trade practice that could be punished with retaliatory tariffs.
Unite Group, the UK’s largest provider of student accommodations, provided its quarterly valuation update for the UK Student Accommodation Fund (USAF) and the London Student Accommodation Fund (LSAV) as of June 30, 2019. USAF’s portfolio was independently valued at £2,399 million, representing a like-for-like increase of 1.3% during the quarter. LSAV’s portfolio was independently valued at £1.275 million, representing a like-for-like increase of 1.1% in the quarter. Unite Group has a 23% ownership interest in USAF and a 50% interest in LSAV. Unite Group also updated its preleasing for its overall portfolio (including wholly owned properties) for the upcoming 2019/20 academic year with reservations progressing strongly with 90% of the beds preleased, slightly ahead of the pace last year at the same time when 89% were preleased.
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.