Sponda CMD 15 May 2013 Helsinki

Transcription

1 Sponda CMD 15 May Helsinki Matt Fletcher, Investor Outreach Maikel Speelman, Research & Indices 1

2 Strategy Research, Indices & Investor Outreach Reporting & Regulation Events/Networking Member No. % Property Co/REITs Portfolio assets > 250bn Investors Banks Universities 19 9 Consultants 19 9 Others 5 2 Total

3 Listed European Real Estate Property Week - Finalists Property Company of the Year British Land member Derwent London member Great Portland Estates member Hammerson member Land Securities member Segro member Developer of the Year Argent British Land member Canary Wharf Group Derwent London member Land Securities member Stanhope 3

4 Newsletters 3 issues per annum x 4,000 copies + online Online data portal Access to company details Index performance Academic research News 4

5 Research & Indices 5

6 FTSE /NAREIT Global Real Estate Indices Leading benchmark adopted by most institutional investors to measure the performance of listed real estate Most widely used amongst dedicated and general investors Passive and active funds managed Transparant set of ground rules, aimed to create an investible and representable real estate index 6

7 Index Availability Global Developed Global Emerging Global North America Developed EMEA Developed Asia Emerging Americas Emerging EMEA Emerging Asia Developed Europe Developed MEA Emerging Europe Emerging MEA 2 countries 16 countries 1 country 6 countries 5 countries 3 countries 6 countries 8 countries Each index has multiple sub-indices: 9 Sectors inc. offices, retail Focus (Rental / Non- Rental) Status (REIT / Non- REIT) 7

8 All Property Sectors Represented 7,9% 9,3% 3,1% 5,3% 12,9% Diversified Retail Office Residential Healthcare Industrial Lodging/Resorts Self Storage Industrial/Office 25,3% 32,0% 2012 Sources: FTSE,, NAREIT Data as of: 30 April 8

9 Asset Exposure -Europe: Combined direct real estate portfolio of over EUR 250 billion Sources: FTSE,, NAREIT, Company reports Data as of: 31 December

10 FTSE /NAREIT Indices Monthly research and data output based on the Index s constituents 10

11 Europe s size 11

12 Growing the Investible Universe Europe s listed real estate sector is currently under represented: Index Market Cap (EUR billion) Global Index. % listed real estate vs. total real estate market Europe 384 North America 275 Asia-Pacific Europe North America Asia-Pacific 16% 14% 12% 10% 8% 6% 4% 2% 0% 3,9% Europe 14,3% North America 14,1% Asia-Pacific Sources: FTSE,, NAREIT Data as of: 31 December 12

13 Why is Europe small? Average company/reit size is 2-3 times smaller Potential v underlying is not matched Persistent discounts to NAV Free float restrictions in some cases Investor culture many prefer direct (control, lower volatility, etc) Regulation hurdles Europe is combination of 27 medium to small states 13

14 Share of European Total 40,0% 35,0% 30,0% 37,7% AUM Invested in Europe 25,0% 20,0% 19,5% 19,2% 20,7% 17,9% 16,7% 19,5% 15,0% 10,0% 5,0% 0,0% 2,2% 3,8% 9,7% 5,4% 0,3% 3,5% 6,3% 2,3% 0,1% 1,7% 4,5% 1,4% 0,2% 2,7% 4,8% 14

15 Performance 15

16 Long Term Outperformance 20-year annualised total return in local currency 10,0% 9,0% 8,0% 7,0% 7,3% 7,7% 8,2% 9,3% 6,0% 5,0% 5,5% 4,0% 3,0% 2,0% 1,0% 2,0% 0,0% Europe Inflation Global bonds Global equities Global real estate Gold Global listed real estate Sources: Eurostat, JP Morgan, FTSE, IPD, Bloomberg,, NAREIT Data as of: 28-Feb-13 16

17 Strong Long Term Performance Annualised Total Returns Europe Listed Real Estate Government Bonds General Equities 1 year 21.9% 5.5% 13.5% 2 year 5.7% 7.6% 3.9% 3 year 11.8% 5.5% 9.2% 5 year (1.3%) 5.9% 1.6% 10 year 8.3% 4.9% 8.2% 15 year 6.4% 5.4% 3.5% 20 year 8.7% 6.7% 7.7% Source: Data as of: 28 February 17

18 Regional Performance Developed Global Developed Europe North America Developed Asia 4 135, ,90 652, , Dec-89 Dec-91 Dec-93 Dec-95 Dec-97 Dec-99 Dec-01 Dec-03 Dec-05 Dec-07 Dec-09 Dec-11 Sources: FTSE,, NAREIT, JP Morgan Data as of: 30-Apr-13 18

19 Research & Academic Research 19

20 Academic Research Actively engage in calling for/promoting/funding academic research in the field of listed real estate Research Committee / Academic Circle Investors (i.e. Pension Funds Boards) like academic research 20

21 Direct Property Portfolio Global Portfolio Regions North America (2 countries) Europe (13 countries) Asia-Pacific (6 countries) Countries United States Canada Offices Retail Industrial Residential Sectors 21

22 How much does it cost? 21 Countries 4 Sectors Average property = $ 25 million 25 properties in each investment segment (21*4*25*25) = $ 52.5 (say) 6.5% RE exposure = $ 807 billion 22

23 Investor Survey 2012 Only a small number treat listed as equities Majority have integrated approach, managing listed either: Internally (ABP, PGGM) Externally (3rd party specialists) ADIA Aviva BNP Paribas Canada Life CBRE Investors Fidelity F&C Hermes JP Morgan Kames Capital Legal & General M&G MN Services Mercer PGGM SWIP SPF Beheer Standard Life Towers Townsend Pensions funds & consultants regard listed as part of the real estate allocation Source: Baum & Moss, September

24 Allocation towards Real Estate and REITs improves the Efficient Frontier Asset Mix (MPT efficient frontier) 16% 14% 12% Equities, Bonds and REITs Equities, Bonds and Real Estate Equities and Bonds REITs effect 10% Real estate effect Return 8% 6% 4% 2% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% Risk March 30, 2012 Source:, FTSE, JP Morgan 24

25 Reporting & Regulation 25

26 Best Practice Recommendations 85% of index report at least one performance measure Number of companies % Market Cap Europe 26

27 Governance & Transparency BPR since 1999 Developed in consultation with investors Standards, transparency and comparability raised Used by > 85% of Index Europe (by market cap) 2011 Sustainability BPR > 65% adoption 27

28 s priorities & current affairs 28

29 Blended Portfolio Demand for real assets including real estate is increasing due to a low-growth and low-returns environment Real esate historically has had high yields Inflation hedging characteristics Demand for greater transparancy caused by higher levels of regulations Higher 29 29

30 Exchange Traded Funds for +/-EUR 20.- exposure to +/-EUR 236,000,000,000.- worth of real estate assets in Europe 30

31 Growing the Investible Universe members have expressed their requirement and appetite for a larger listed real estate sector in Europe Introduction of true REIT regimes in all European countries, or on a European level The need for sustainable income actively engages with governments, investors and companies to improve the listed real estate market in each European country 31

32 REITs in Real Asset Strategies Recent Product Development Efforts (USA, source: NAREIT) Organisation Real Assets Recommended Application of REIT Allocation BlackRock Commodities, REITs, TIPS Approx. 33% (global) of real assets strategy Cohen & Commodities, gold natural resource 25-35% (global) of real assets Steers Northern Trust equities, REITs, variable rate notes Commodities, REITs, TIPS strategy 6% (global) constant allocation across TDF glide path as component of Inflation Hedge Sleeve PIMCO Commodities, REITs, TIPS 15% (domestic) max allocation over portions of TDF glide path for diversification, but also to hedge against inflation Russell Commodities, Listed Infrastructure, REITs, TIPS 22.5% (global) allocation within Real Asset Model Allocation 32

33 DC Plans: Trends in the Industry 401(k) Plans Offering a Real Estate Option (USA) 40% 35% 30% 33,4% 25% 20% 15% 10% 5% 0% 5,2% 4,8% 5,1% 4,8% 6,3% 8,6% 11,8% 11,8% 15,6% 18,8% 19,1% 23,7% 24,8% Sources: NAREIT / Profit Sharing/401(k) Council of America 33

34 Key Themes & Opportunities Quality direct assets, locations, management teams Strong Long Term Performance Attractive Dividend Yield Diversification country & sector of direct assets Governance & Transparency Excellent Liquidity 34

35 Global diversification Direct investment Zones Zonal markets Property sectors No. of properties Ave. price ( m) Total invested ( m) EMEA ,000 Americas ,000 Asia Pacific ,000 75,000 and real estate is generally no more than 10% of a multi-asset portfolio use all the tools in your toolbox 35