In the U.S.:
- Speaking in Mississippi, St. Louis Federal Reserve President James Bullard, a voting member, stated that the Fed would need to “tread carefully going forward in order to sustain the economic expansion”. Mr. Bullard noted that investors appeared to be betting that the inflation outlook would be subdued going forward and below the Fed’s 2% target rate.
Summit Hotel Properties (INN) sold 6 hotels for $135M. The sale resulted in a net gain of $36.6M, which the company has stated will be used to reduce the outstanding balance of Summit’s unsecured revolving credit facility.
- Q1 GDP expanded by 6.4% y/y, which was unchanged from December’s reading and slightly better than the consensus estimate of 6.3% y/y growth. The better than expected result was seen as a sign that Beijing’s easing measures to counterbalance the ongoing trade war tariffs were working.
- March Industrial production jumped 8.5% y/y versus February’s 5.3% y/y reading. The jump in production was the fastest growth increase since July 2014.
- March exports shrank by 2.4%, the fourth straight monthly drop, as weakness in global demand continued to weigh on the economy. Of note, exports to the US grew by 4.4% but were offset by weak demand out of China.
Following CWT International Ltd.’s default on $179M loan, shares of Singapore-listed Cache Logistics Trust and Mapletree Logistics Trust, which both count CWT as a key tenant, fell sharply. As of December 31, 2018, CWT accounted for 20.6% of Cache’s gross rental income and 9.1% of Mapletree’s gross revenue.
- Eurozone March inflation data was confirmed at 1.4% versus February’s 1.5% reading. The lackluster reading opens the door for the ECB to consider additional easing measures.
- The US Speaker of the House, Nancy Pelosi, visited the UK/Irish border and warned that the UK must refrain from damaging The Belfast Agreement, which brought peace to Northern Ireland. Mrs. Pelosi eluded that any trade deal with the US would be contingent on a peaceful Brexit solution for the Northern Ireland border.
Segro Plc, one of Europe’s largest logistics landlords, provided an interim period update of its operations for the period from January 1 to April, 16, 2019. During the first quarter, the company secured £21.2 mn of new annualized headline rents with the vacancy rate declining to 4.4% versus 5.2% at December 31, 2019. The decline in the vacancy rate reflects strong leasing activity of both existing and recently completed space. Segro currently has 44 projects under construction which will generate approximately £57 mn of annualized headline rents when completed and stabilized. These projects are 72% preleased. Segro raised £451 of new equity in February to further strengthen its balance sheet to support further development led growth across its holdings in the UK and Continental Europe. As of March 31, 2019, Segro’s LTV was approximately 23%, adjusted for development expenditures, acquisitions and disposals.
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.