In the U.S.:
- The White House continues to be on defense as new details emerge regarding the whistleblower report showing a potential cover up of the President’s call with the Ukrainian president where it appears that President Trump urged the Ukrainian president to pursue an investigation into his political rival Joe Biden. Congress has opened an official impeachment inquiry, which has been labeled a witch hunt by the White House.
Paramount Group, Inc. (PGRE) announced the sale of Liberty Place in Washington D.C. for $154.5M. Paramount Group plans to use the proceeds to fund its recent purchase of Market Center in San Francisco.
- Trade talks with the US seem to have de-escalated this week as China has ramped up purchases of US agricultural products. The move could be seen as a way to show good faith as both sides are set to resume trade talks on October 10-11. However, Bloomberg noted on Friday that White House officials were considering limiting US investor portfolio flows into China.
- September Market manufacturing PMI was 48.9 versus August’s 49.3 reading. The drop in PMI was the most in 7 months leading to increased calls for the BOJ to bolster its already massive stimulus program.
The Hong Kong government rejected all five tenders for the Kai Tak Area 4C Site 4 as all offers failed to meet the government’s reserve price. The companies offering tenders were CK Asset, Sun Hung Kai Properties, Chinese Estates, Sino Land and Great Eagle.
- Flexible workspace accounted for 35% of commercial property transactions in London over the past year, according to a recent study. Flexible workspace, which includes co-working, serviced offices and hybrid spaces, now accounts for 6% of the total UK office market.
- Logistics take-up was 11.9 million square meters in Europe during the first half of 2019, which is in-line with the half-year averages over the past five years, according to the latest European Logistics report by Savills Research. Germany accounted for 25% of this total (2.9 million square meters), followed by the Netherlands (16%), Poland (15%), UK (12%) and France (12%).
Capital & Counties Properties PLC (Capco) provided a brief update on its proposed demerger of Covent Garden into a separate central London focused retail REIT, initially announced on July 25, 2019, indicating it has received a “broad range of interest” in a potential sale of Earls Court. Demerger documentation has also been “substantially finalized” and is expected to be published by the end of October 2019 if a sale of the consented masterplan mixed-use development Earls Court has not “progressed satisfactorily”, with current indicative pricing below recent balance sheet (i.e., appraisal) values. Covent Garden and Earls Court were recently valued at £2.6 billion and £0.6 billion, respectively.
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.