In the U.S.:
- August Flash Manufacturing PMI fell 0.5 bps to contraction territory for first time in a decade at 49.9 versus July’s 50.4 reading. A weak auto sector and global economic headwinds were cited as the main drivers to the disappointing reading.
Sun Communities, Inc. (SUI) entered into an agreement to acquire a 31-community manufactured housing portfolio for $343.6M through a merger of Jensen’s, Inc. into a subsidiary of the company. The communities are located in 8 states with 35% of the sites in Connecticut.
- Beijing announced on Friday that it would levy retaliatory tariffs on 5-10% on another $75B worth of US goods, including oil, effective 1-Sep. The move was not a surprise as Beijing has repeatedly warned it would implement countermeasures in response to the White House’s decision to impose new tariffs. US President Donald Trump vowed to respond by Friday afternoon, via Twitter.
- The WSJ reported that South Korea was withdrawing from the General Security of Military Information Agreement (GSOMIA) to share military intelligence with Japan. The move comes amid ongoing trade disputes between Tokyo and Seoul.
Hong Kong’s CK Asset Holdings Ltd. agreed to buy Greene King Plc for approximately 2.7 billion pounds ($3.3 billion). Greene King shares surged 51% on Monday to the highest level since the Brexit vote.
- German Chancellor Angela Merkel challenged UK PM Boris Johnson to come up with an alternative to the Irish backstop in 30 days which Johnson accepted. While the remarks signaled signs of a shift, Mr. Johnson was quick to taper expectations that he would succeed and that a no deal scenario was still quite possible.
- August Eurozone manufacturing PMI came in slightly above consensus estimates at 47.0 versus July’s 46.5 reading. Although manufacturing ticked up slightly it still remained firmly in contraction as trade tensions continue to weigh on the Eurozone.
Safestore Holdings (Safestore), a UK listed self-storage operator that operates in both the UK and Paris metro area in France, announced this week that it was expanding into the Dutch self-storage market via a newly formed joint venture (JV) with a real estate fund of the Carlyle Group. Safestore will have a 20% interest in the JV which will acquire M3 Self Storage (M3), an operator of six prime storage locations in Amsterdam and Haarlem in the Netherlands. Safestore will invest €5 mn into the JV for its 20% stake and will provide management services for the JV. Safestore expects the transaction to be earnings accretive and earn an initial return on investment of 8% before transaction related costs in the first full year of the JV. Although a relatively small transaction, the JV represents a good opportunity for Safestore to take a measured approach towards expansion elsewhere within Continental Europe beyond Paris. Safestore has been one of the better performing REITs in the UK and Europe in recent years given its strong operating platform in a niche sector.
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.