In the U.S.:
- As expected, the Fed kept rates unchanged. The central bank reduced GDP and inflation expectations and signaled that there would not be any further rate hikes this year.
Office Properties Income Trust (OPI) completed the sale of 500 First Street NW in Washington, D.C. to Georgetown University for $70M. The currently vacant 130K sq. ft. office building is located near Georgetown’s law school campus and within a half mile of Union Station.
- Bloomberg reported that US officials are downplaying prospects of an imminent trade deal. China has pushed back on their agreed policies regarding intellectual property as they are concerned that they have not received any assurances from the Trump administration that export tariffs would be lifted.
- March flash manufacturing PMI was unchanged at 48.9, the second straight month in contraction. Demand for Japanese exports continued to be hindered by the ongoing US/China trade war.
Bloomberg reported that CapitaLand REIT is said to be in talks to buy the Duo Office Tower in Singapore. The 568K sq. ft. grade A office tower and 56k sq. ft. retail plaza is said to be valued at approximately $1.1B. The property is currently owned by a joint venture between Khazanah Nasional Bhd. and Singapore state investment firm Temasek Holdings Pte.
- The EU gave a little reprieve in Brexit negotiations as they agreed to the UK’s request for a short-term extension of the Brexit deadline. The UK now has until May 22nd to exit the EU.
- Eurozone growth concerns grew as the Composite PMI fell to 51.3 from 52.7. Of note, German manufacturing PMI fell to 44.7 from 47.6, the lowest level since 2012, on weaker global demand and a slowdown in the auto industry.
In an example of how retail landlords are increasingly seeking to find alternative ways to create value at their shopping centers given the challenging retailing environment, Unibail-Rodamco-Westfield announced this week that it had formed a joint venture partnership with a Canadian public pension fund and a private real estate company to develop, own and manage an ≈ €750M scheme that would contain approximately 1,200 residential units. The site is adjacent to Unibail’s Westfield Stratford City shopping center on the east side of London. Investors have been showing increased interest in the private rented residential sector in London and the UK which is not as established as the US residential rental sector. Unibail would contribute the site and retain a 25% interest in the JV, while also serving as the development and asset manager of the scheme. The other two partners would each own a 37.5% interest in the JV.
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.