In the U.S.:
- The Fed minutes and subsequent speeches showed that policymakers are torn on the correct path forward given the current data. Some members fear that being too accommodative would leave the Fed vulnerable with little tools to combat future recession risks. Of note, the NY Fed announced that it would start buying $60B per month in Treasuries beginning 15-Oct.
Pebblebrook Hotel Trust (PEB) announced the sale of the Topaz Hotel in Washington DC for $33M. Pebblebrook is targeting Q4 to complete the sale.
- US President Trump stated that the US and China have reached a “substantial phase 1” trade agreement, though it may take over a month to cast it into writing. The agreement holds the 15-Oct US tariff hikes and reportedly contains provisions involving IP protections, ag purchases, FX transparency, and financial services.
- September Domestic CGPI NSA fell by 1.1% y/y versus August’s 0.9% y/y drop. The stagnant growth continued to highlight the affects that the US/China trade war continues to have on Japan.
Ming Pao reported that Henderson Land was considering donating 100,000 sq. ft. of farmland in the Pat Heung area in Yen Long for government subsidized transitional housing. The move comes after New World Development announced plans to donate 20% of its farmland to the government and non-profit organizations for similar purposes.
- Sky News, citing sources, said Britain is proposing move towards a pared-down free trade agreement to get a Brexit deal done by the end of October. While the report said it will not resolve all of the issues, it could form the foundation for a wide-ranging agreement.
- Turkey has started a military campaign on the northern border of Syria. The move comes after US President Trump decided to withdraw US forces that had been fighting in the region. The offensive from Turkey and withdrawal of US forces has gotten swift condemnation from NATO allies.
Student housing REIT Unite Group made a series of generally positive announcements this week. First it announced the results of its quarterly valuation reports this week for the Unite UK Student Accommodation Fund (USAF) and the London Student Accommodation Joint Venture (LSAV). USAF’s independent valuation of its property portfolio increased 0.6% on a like-for-like basis during the third quarter ending September 30. LSAV’s property portfolio value increased 1.9% on a like-for-like basis in the quarter. Unite is the UK’s largest private owner of student accommodation properties and owns interests in over 48k beds, including its 25% stake in USAF and a 50% stake in LSAF. Secondly, Unite announced that it had sold two wholly owned student housing properties in Coventry, UK to Mapletree Investments for £96 mm to bring its YTD disposals to £250 mn, which is in line with its target of £150 – £200 mn of disposals per annum over the next three years to both help fund its development activities and reduce its leverage, which would temporarily tick up following its proposed merger with Liberty Living, which is expected to close prior to year-end. Lastly, Unite confirmed that as it enters the final stages of its leasing cycle for the 2019/20 academic year, it has achieved strong leasing performance across its portfolio with 98% of its bed let for the academic year.
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.