Attracting Investors to REITs Fraser Hughes, EPRA 14 November 2014 - - PowerPoint PPT Presentation

▶
attracting investors to reits fraser hughes epra
SMART_READER_LITE
LIVE PREVIEW

Attracting Investors to REITs Fraser Hughes, EPRA 14 November 2014 - - PowerPoint PPT Presentation

Oct 15, 2023 11 likes •332 views

Attracting Investors to REITs Fraser Hughes, EPRA 14 November 2014 Author: EPRA Strategy All three areas Investor Outreach, Indices & Research support & Reporting & Regulation promote the Events & Networking

slide-1
SLIDE 1

Author:

Attracting Investors to REITs Fraser Hughes, EPRA

14 November 2014

slide-2
SLIDE 2

Author:

2

EPRA Strategy

Representing Gross Value > EUR 350 Billion

Member Category No. % Property Co/REITs 110 54 Investors 45 21 Universities 24 11 Consultants 11 5 Insurance Companies 10 5 Banks & Law Firms 7 3 Others 3 1 Total 210 100

All three areas support & promote the sector

  • Investor Outreach, Indices & Research
  • Reporting & Regulation
  • Events & Networking
slide-3
SLIDE 3

Author:

3

Global Listed Real Estate Benefits

  • FTSE EPRA/NAREIT Global Index
  • Diversification & liquidity
  • Quality assets & management
  • Strong Total Returns & Dividend Yield
  • Governance & Transparency
  • Research
  • Promotion
slide-4
SLIDE 4

Author:

4

FTSE EPRA/NAREIT Global Index

slide-5
SLIDE 5

Author:

5

FTSE EPRA/NAREIT Global Index

Minimum size Minimum liquidity Minimum free-float Minimum level of relevant real estate income Detailed English annual reporting

A focused, relevant and investible benchmark for global real estate To create: Five major criteria for inclusion:

Underpinned by 4 committees with total of > 300 years experience!

slide-6
SLIDE 6

Author:

6 2 Countries 16 Countries 1 Country 6 Countries

Developed Global Emerging Global

Emerging Europe Emerging MEA

5 Countries 5 Countries 9 Countries 8 Countries

Emerging Americas Emerging EMEA Emerging Asia

Each index has multiple sub-indices: 9 Sectors Rental or Non-Rental REIT or Non-REIT

Developed EMEA Developed Asia North America

FTSE EPRA/NAREIT Global Index

Global

Developed Europe Developed MEA

slide-7
SLIDE 7

Author:

7

FTSE EPRA/NAREIT Global Index

Underpinned by 4 committees with total of > 200 years experience! Index Use:

  • Specialist Managers
  • Pension Funds
  • Global ETFs market
  • US$ 10.5bn AUM
  • Futures contracts – Europe
  • OTC products

You need to be on investors radar!

slide-8
SLIDE 8

Author:

8

Global diversification

Zones Zonal markets Property sectors

  • No. of

properties Ave. price (€m) Total invested (€bn) EMEA 10 4 25 25 25 Americas 10 4 25 25 25 Asia Pacific 10 4 25 25 25 Total Investment required: 75

Direct investment

and if real estate is 10% of the total portfolio = €750bn!

slide-9
SLIDE 9

Author:

Pension Fund Country 2012 AUM ($bn) 2013 AUM ($bn) GPJ Japan 1,181 1,227 APG NL 418 477 NPF Korea 359 402 CDC France 341 395 FR Thrift US 321 358 Others 27,134 29,121 Total (Source: Towers Watson 2014) 29,754 31,980 Sovereign Wealth Fund Country 2012 AUM ($bn) 2013 AUM ($bn) GPF Norway 716 838 ADIA UAE 627 773 SAMA Saudi 568 676 CIC China 533 575 SAFE China 482 568 Others 2,396 2,892 Total (Source: SWF 2014) 5,322 6,322

Significant Global Investors

9

(If) Government Pension Fund of Japan invests 5% in real estate = $60bn!

slide-10
SLIDE 10

Author:

Global Asset Exposure – €1.5 Trn

Region Companies Assets Top 10 own Asia 78 5,100 900 Europe 86 14,300 1,500 Nth America 143 32,000 7,200

slide-11
SLIDE 11

Author:

11

12 South African companies own 1,500 Assets 18.5 sq.km. of Floor Space

South Africa Asset Exposure

Cape Town Johannesburg

Sandton

slide-12
SLIDE 12

Author:

One New Change - London Paris

  • 500,000 sqm owned at La Defense
  • Major player in the Greater Paris project
  • EPRA Member: Icade

The Leadenhall Building – London Paris

  • Located in La Defense
  • Tenants include: PWC, LCL Bank & Heineken
  • EPRA Member: Gecina
  • Heart of City of London overlooking St Paul’s Cathedral
  • Approx. 20,000 sqm Retail, 35,000 sq m Offices
  • EPRA Member: Land Securities

Company Examples – Major Cities

12

  • 224m tall building in centre of City of London
  • Office largest in Europe including 7 stories open plan
  • EPRA Member: British Land
slide-13
SLIDE 13

Author:

Lowenbrau site - Zurich Alte Post – Hamburg

Company Examples - Offices

13

MainTor - Frankfurt Oslo - Norway

  • Zürich West, former industrial area „Kries 5“
  • Disused brewery dated back to 1897
  • EPRA Member: PSP Swiss Property
  • Six impressive buildings in financial district
  • Over 100,000 sqm (mix of retail and offices)
  • EPRA Member: DIC
  • Addition of a new 6-floors development
  • 9,800 sqm (mix of retail and offices)
  • EPRA Member: alstria
  • Refurbishment docklands area
  • Mixed use, office, retail and urban space
  • EPRA Member: Norwegian Property
slide-14
SLIDE 14

Author:

SOHO - London Gare St Lazare – Paris

Company Examples - Retail

14

  • Mix of retail, office & living space
  • Mix of flagship stores and specialist retailers
  • EPRA Member: Shaftesbury
  • Refurbishment of station attracting 500,000 commuters daily
  • 80 retailers & 10 restaurants
  • EPRA Member: Klépierre
  • 11,500 sqm retail and leisure
  • 16.7mn visitors per annum
  • EPRA Member: Unibail-Rodamco

Carrousel du Louvre – Paris

  • Located in Euromediterranee regeneration area
  • 190 stores & 260m long restaurant terrace
  • EPRA Member: Hammerson

Les Terrasses du Port - Marseille

slide-15
SLIDE 15

Author:

Student Accommodation – UK Co Working & Shared Offices - UK Healthcare – Belgium & France Industrial – UK & Europe

  • Warehousing, logistic & datacenters
  • 5.8million sqm worth over GBP4.5billion
  • EPRA Member: SEGRO
  • 43,000 Students in 130 sites in 23 UK cities
  • New and refurbished modern & energy efficient units
  • EPRA Member: Unite

Company Examples - Specialist

15

  • 30,000 people employed in offices
  • Refurbished warehouses/derelict city spaces
  • EPRA Member: Workspace
  • In 2005 Cofinimmo identified nursing homes
  • Now 40% of total portfolio
  • EPRA Member: Cofinimmo
slide-16
SLIDE 16

Author:

Sources: FTSE, EPRA, NAREIT Data as of: September 1, 2014

Regional Breakdowns

150 constituents Mkt Cap EUR 119 Bn. 52,6% 32% 16%

Developed

North America Asia EMEA 306 constituents Mkt Cap EUR 927 Bn. 56% 26% 18%

Emerging

Asia Pacific EMEA Americas

slide-17
SLIDE 17

Author: EPRA 2012

Sources: FTSE, EPRA, NAREIT Data as of: August 30, 2014

Global Property Sectors

4% 30% 25% 13% Residential 10% Health Care 7% Industrial 6% 4% Self Storage 3% 2%

Diversified Retail Offices

Industrial/

Offices

Lodging & Resorts

slide-18
SLIDE 18

Author:

18

Sources: Eurostat, JP Morgan, FTSE, IPD, MSCI, Bloomberg, EPRA, NAREIT Data as of: September 30, 2014 Note: Based on assumptions made by EPRA

Strong Long Term Performance

0,5% 3,4% 2,6% 4,5% 3,9% 1,3% 4,9% 4,5%

0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% 9,0% 10,0%

Global Bonds Global Equities Global Real Estate Global Listed Real Estate

Capital Growth Yield DIRECT LISTED & REITs 15-year annualised total return in local currency

slide-19
SLIDE 19

Author:

Annualised Local Total Returns

Source: EPRA Data as of: September 30, 2014

Global Listed Real Estate Global Government Bonds Global General Equities 3 years 18.0% 3.3% 19.1% 5 years 14.6% 3.9% 11.4% 10 years 7.6% 3.9% 7.8% 15 years 9.0% 4.4% 4.7% 20 years 8.7% 5.5% 7.7%

slide-20
SLIDE 20

Author:

Transparency - EPRA BPR 2014

Total of 84 European companies surveyed

  • 50% gained a ‘medal’ or award:
  • 25 gold medals
  • 9 silver medals
  • 8 bronze medals
  • 81% disclose at least 1 EPRA measure (91% mkt cap)
  • 33% disclose all 6 EPRA measures (58% mkt cap)
  • South African BPRs & EPRA BPRs under EMEA umbrella?

20

slide-21
SLIDE 21

Author:

Transparency – BPR 2014

Alstria Befimmo British Land Citycon Cofinimmo Corio Derwent FDR Gecina Hamborner Hammerson Icade INTU Klepierre Land Secs Leasinvest Mobimo NSI PSP SEGRO Sponda Unibail Vastned WDP Wereldhave Aedifica Affine Capco Great Portland Intervest Office Mercialys Picton Shaftesbury SPS Atrium Development Secs DIC EuroCommerical Helical Bar LondonMetric STE Workspace Icade NSI Wereldhave Aedifica Intervest Office

slide-22
SLIDE 22

Author:

Transparency....but 42 Co’s Below Bronze!

22

Deutsche Annington Deutsche Euroshop Deutsche Wohnen GAGFAH LEG Prime Office TAG Balder Castellum Dios Fabege Hemfosa Hufvudstaden Klovern Kungsleden Wallenstam Wihlborgs Beni Stabili IGD ANF Wereldhave Belgium Big Yellow Daejan Hldgs F&C Commercial F&C UK Grainger Hansteen MedicX Primary Health Quintain St Modwen Safestore Schroder REIT Standard Life UK Commercial Unite CA Immo Convert

Colonial

Allreal Technopolis Eurobank

Non-EPRA members are underlined

slide-23
SLIDE 23

Author:

Transparency - sBPR 2014 Results

Corio*** Hammerson*** STE* Wereldhave*** Alstria*** Befimmo*** DIC Asset* Sponda*** Technopolis Wereldhave Belgium Grainger Great Portland** INTU*** Klepierre*** Land Secs*** SEGRO*** Unibail*** Workspace* British Land*** Beni Stabili Citycon*** Cofinimmo*** Derwent London*** EuroCommercial* FDR*** Gecina***

  • 10 companies won gold BPR & sBPR
  • 57% reported at least one sBPR (74% mc)
  • 31% achieved an award (27% - 2013)

***Gold BPR ** Silver BPR * Bronze BPR

slide-24
SLIDE 24

Author:

Transparency - GRESB

Ranking Table 2014 Points Australia Listed 68 Australia Non-Listed 63 Europe Listed 54 Asia Listed 51 Nth America Listed 49 Europe Non-listed 47 Asia Non-listed 44 Nth America Non-listed 42

“Green Stars”

Management = 64 * 0.30 Implementation = 49 * 0.70 >50 required in both categories to achieve “green star” status

Global Listed scored 52 v Global non-listed scored 45

slide-25
SLIDE 25

Author:

25

EPRA Research

Daily, weekly, monthly & ad-hoc tailored research and data output based on the Global Index constituents

slide-26
SLIDE 26

Author:

0% 10% 20% 30% 40% 50% 60% 50 100 150 200 250 300 350 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014

FTSE EPRA UK DTZ Transactions UK FTSE EPRA UK LTV

26

UK Listed v Transactions & LTV

Sources: FTSE, EPRA, DTZ As of: June 30, 2014

Crisis

+81% Values (26), LTVs Level + 35% Values (22), LTVs -15%

slide-27
SLIDE 27

Author:

27

50 100 150 200 250

Degeared FTSE EPRA UK NAV FTSE EPRA UK NAV FTSE EPRA UK IPD UK Capital Growth

FTSE EPRA UK leads IPD by +/- 2 quarters

Listed is Proxy for Direct

Sources: FTSE, EPRA, IPD Data as of: Aug 31, 2014

FTSE EPRA UK par with spot NAV Degeared FTSE EPRA UK

  • utperforms IPD
slide-28
SLIDE 28

Author:

28

Academic Research

  • Leading universities in committee
  • Cambridge University is current chair
  • Research to bolster the investment case
  • Average of 5 projects per annum focusing on:
  • Performance
  • Allocations
  • Correlations
  • Full academic reports and executive summaries

published – hits a broad audience

  • EPRA research compendium is home for all reports
slide-29
SLIDE 29

Author:

29

Correlation declines with equities and increases with direct real estate

  • Correlation with stocks declines as

investment horizon increases

  • Potential for strategic investors:

Good diversification with allocation to listed real estate in the long run

0% 20% 40% 60% 80%

FTSE 100 / Developed Europe

1 3 6 12 24 36 48 60 0% 20% 40% 60% 80% 100%

Developed Europe / IPD property index

3 6 12 24 36 48 60 0% 20% 40% 60% 80% 100%

6 months 1 year 2 years 3 years 5 years 10 years

Correlation declines with equities and increases with direct real estate

General Equities v Listed Direct v Listed

Sources: IPD, Bloomberg, EPRA Data as of: 31/12/2013

slide-30
SLIDE 30

Author:

30

Research – Equities or Property?

  • “Are REITs real estate?
  • Examined whether listed real estate returns

reflect direct property or general equities in:

  • US, UK and Australia
  • Short term linked to stock market
  • Mid/long term linked to direct real estate
  • Opportunities to ‘blend’ real estate exposure
slide-31
SLIDE 31

Author:

31

Research - Blended Allocations

slide-32
SLIDE 32

Author:

32

Summary

  • Quality assets & management
  • Strong total performance
  • Attractive yields
  • Diversification
  • regional, countries & sectors
  • Liquidity
  • Governance & transparency