In the U.S.:
- Reuters highlighted comments from NY Fed President Williams stating that the US economy is in a “very, very good place.” Mr. Williams argued that last year’s rate cuts have put the economy on a path to continue its expansion.
- In earnings, 389 companies in the S&P 500 Index have reported, 75.8% beat, 1.0% were in-line, and 23.2% missed estimates.
National Storage REIT announced that it had received an unsolicited non-binding indicative proposal from Public Storage (PSA) to acquire 100% of the issued stapled securities of NSR for a cash price of A$2.40 per stapled security by way of inter-conditional company and trust schemes. The move would give Public Storage exposure to the Australian market which it has said to be seeking for over two years. National Storage has granted PSA access to do their due diligence.
In REIT earnings, 49 companies in the Wilshire U.S. REIT Index have reported, 34 beat, 3 were inline, and 12 missed estimates.
- Reuters cited latest National Health Commission figures showing coronavirus fatalities rose 121 while confirmed cases climbed 5,090 on 13-Feb, taking cumulative totals to 1,380 and 63,851 respectively. Beijing and other major cities have implemented 14 day self-isolation rules for people returning to the city from the Lunar New Year holiday.
- Authorities decided to let 11 passengers of the coronavirus stricken cruise ship quarantined in Yokahama disembark. The passengers either had medical conditions or windowless rooms and had tested negative for the virus. The passengers would be quarantined in a government facility till Feb. 19th. 218 passengers aboard the vessel have tested positive for the virus, including 32 Americans.
In an effort to aid retail tenants with coronavirus challenges, CapitaLand shortened the operating hours of its Singapore retailers by three hours. CapitaLand also rolled out a S$10m marketing assistance program to support retailer-driven promotions.
- UK December industrial production was 0.1% m/m versus November’s -1.1% drop. Although the uptick was welcomed, the reading was short of estimates of a 0.35% rise.
- Eurozone December industrial production was -2.1% m/m versus November’s flat reading. The reading marked the worst monthly drop since the financial crisis led by significant drops in production from Germany and Italy.
Unibail-Rodamco-Westfield (URW), which operates shopping centers across both Europe and the US, reported its FY 2019 results this week. Annual recurring EPS (AREPS) of €12.37/sh was slightly ahead of expectations and the company’s mid-year guidance. Tenant sales increased 3.7% for the year, +4.7% in Europe and +1.6% in the US. Net Rental Income increased 3.1% on a like-for-like basis (LFL) in Continental Europe and +4.2% in the UK. Comparable NOI increased 2.4% in the US. EPRA NAV/sh declined 3.8% YOY to €213.30/sh. Shopping Center Gross Market Value (GMV) declined 2.0% on a LFL basis, while the Office & Other segment increased 6.2% on a LFL basis. The decline in reported GMV’s was a bit less than expected given the challenging retail environment and the declines reported by other retail owners in recent weeks. URW also reported that it had agreed to form a JV with various institutional partners on five French shopping centers that URW was contributing to the JV. The implied valuation (at 100%) for the assets is just over €2 bn at a net initial yield of 4.80% and is in line with the last reported value for the properties. URS would initially hold a 45.8% interest in the JV, but could potentially decline to a lesser amount should other investors show interest in the JV. URW also introduced 2020 earnings guidance and expects that AREPS will be in the range of €11.90/sh – €12.10/sh. The range reflects an approximate €0.50/sh drag from dispositions in 2019 and 2020. URW has also significantly scaled back its development pipeline from a year ago following a close review of each of its projects.
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.