In the U.S.:
- Former NYC mayor Michael Bloomberg is preparing the paperwork necessary to enter the 2020 presidential race. Mr. Bloomberg’s centrist democratic views and large bank account could make him a strong candidate to challenge Trump for the 2020 race.
- In earnings, 446 companies in the S&P 500 Index have reported, 78.5% beat, 0.7% were in-line, and 20.8% missed estimates.
Rexford Industrial Realty (REXR) announced the acquisition of the 404-430 Berry Way industrial property located in Brea, CA for $27.6M. The 120K sq. ft. property consists of three buildings on 11.79 acres of land.
In REIT earnings, 102 companies in the Wilshire U.S. REIT Index have reported, 73 beat, 3 were in-line, and 26 missed estimates.
- The “phase 1” trade deal with the US seems to be continuing forward although the location and date of a potential signing has been in question since Chile canceled the climate change summit due to protests. Reports this week saw both sides talk about tariffs being rolled back on China until the White House chimed in on Friday stating the contrary. Of note, the markets largely shook off the White House’s Friday statement.
- October Services PMI dropped to 49.7 m/m versus September’s 52.8 reading. The unexpected drop was likely caused by the new sales tax hike and the after effects of Typhoon Hagibis, which caused widespread flooding damage.
Swire Properties has started to offer rental adjustments for its tenants of three Hong Kong malls to offset the ill effects of the protests on mall demand. This follows a similar move by Sun Hung Kai Properties a few weeks ago.
- September German exports increased 1.5% m/m versus August’s 0.9% m/m decline. The reading was the biggest monthly increase in nearly two years on better than expected new orders.
Alstria Office REIT-AG reported its interim results for the nine months ended 9/30/19. Leasing activity remains strong and is on pace for a record level of leasing for the year. Year to date leasing totals 123,100 sq m of new leases and 81,300 sq m of renewal leases. The EPRA vacancy rate has declined from 9.7% at 12/31/18 down to 7.4% 9/30/19. The record level of leasing includes assets with its development/redevelopment pipeline which should provide for added growth in revenues upon completion of the projects. No updated valuation done on the portfolio since 6/30/19 with the next update to be done at year end with full year results. Management did indicate some further upward movement in NAV (€16.33/sh at 6/30/19) with the year-end valuation. The balance sheet remains very strong with a LTV of 29.0% at 9/30/19.
Separately, Derwent London also provided a brief third quarter business update with strong leasing activity for the year resulting in 486,000 sf of leasing year-to-date that was on average 7.0% above December 2018 estimated rental values (ERV). This includes the recently announced 83,100 sf pre-let to Apollo Management International at its 1 Soho Place development. At period end Derwent had three projects under development totaling 790,000 sf with 70% of the commercial space pre-let. Derwent’s 80 Charlotte Street development delivers in 1H 2020 with 92% of the commercial space pre-let, while its other two projects do not deliver until 1H 2022. Year-to-date property disposals total £182 mn at approximately 6.2% above December 2018 appraised values. The balance sheet remained strong with a LTV of 16.4% at 9/30/19 and £580 mn of cash and undrawn facilities.
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.