In the U.S.:
- Unemployment claims jumped this week with 3.28M people filing for benefits versus 282K. The weekly jump was the most ever seen since the Department of Labor started tracking the data in 1967.
- President Trump signed a historic $2.2T coronavirus stimulus bill into law. The stimulus deal reached at the house will provide essential aid for American’s that have been adversely impacted by the coronavirus pandemic.
Equity Residential (EQR) announced that it would be supporting residents that have been negatively impacted by the pandemic. They stated that they would halt evictions for 90 days, work with tenants create payment plans, and identify community resources to help residents secure basic necessities.
- The Chinese foreign ministry said it was suspending entry to foreign nationals. The move was necessary as the bulk of new cases were coming in from abroad.
- PM Shinzo Abe established a coronavirus task force to oversee the efforts to combat the virus. PM Abe also announced a travel ban of entry by 21 European countries as well as Iran and stated that a lockdown of Tokyo would have a severe impact on the national economy.
Shares of Japanese advertisers, hotels, real estate companies, and other Olympic related businesses jumped on the news that the games would be postponed a year. The news was welcome relief as many of the companies feared that an outright cancellation of the games could occur.
- The EU was unable to reach a consensus on a strategy to combat the coronavirus. The main point of contention was the use of “Coronabonds” or mutualized debt instruments. European leaders decided to table the talks and decided to lean on their finance ministers to come up with proposals within the next two weeks.
- UK PM Boris Johnson tested positive for the coronavirus. PM Johnson is self isolating but will continue to lead the government from Downing Street The virus has killed over 700 and has infected over 14,500 in the UK.
Deutsche Wohnen, Germany’s second largest listed residential property company, reported its FY19 result this week that were broadly in line with expectations. FFO1 was €538 mn and like-for-like rental growth was +3.4%. The like-for-like vacancy rate was 1.8%. The company announced that the €750 mn share repurchase program announced last year is approximately 38% completed at an average price of €35.77/sh. EPRA NAV at year end was €47/sh and the LTV was at 35.4%, the lower end of its target range of 35% – 40%. Guidance for FY20 indicated that FFO1 would be relatively flat at approximately €539 mn with like-for-like rent growth of +1.0% on a cash flow basis. In a move that should be welcomed given how the current crisis has affected many, the company indicated its clear commitment to social responsibility, particularly during this type of the COVID-19 crisis. It announced plans to reduce its dividend payout ratio from 65% of FFO1 to 60% of FFO in order to support the establishment of a €30 mn relief fund to provide help to its commercial and residential tenants affected by the COVID-19 crisis and to tradespeople and small service providers.
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.