Emerging Market Property

Transcription

1 Emerging Market Property Keillen Ndlovu Head of Listed Property Funds May 2018

2 Identifying Improving Fundamentals and Compelling Catalysts for Investing in the Global Emerging Property Sector.

3 Emerging Markets Property Sector 83% of index are developers with the remaining 17% in REITs 50,0% 45,0% 40,0% 35,0% 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% Developer REIT Source: STANLIB Performance, Analytics and Risk Implementation as at end December

4 EM achieved a peak of 14% USD returns in January This has however tapered to 2% USD returns Price Index based to ,00 S&P Emerging Market Property Index 110,00 105,00 100,00 95,00 90,00 Source: STANLIB Research; Bloomberg; April

5 Mexico the star performer YTD Sector achieved +14% in USD 120,00 S&P Mexico REIT USD Index 115,00 110,00 105,00 100,00 95,00 90,00 85,00 80,00 Source: STANLIB Research, Bloomberg, April

6 Industrial vacancy rate reaches new low of 3.9% Strong demand from existing corporates but reduced new entries Source: HSBC Mexican Property Research, February

7 50% of trade between US & Mexico done by WTO NAFTA Participants Labour cost index Source: UBS Mexico Property Research,

8 Mexican exposure defensively positioned Attractive dividend yields, high % rents in USD and debt fixed Company Forward D/Y in USD % Rents in USD % Debt fixed Corp Inmobiliaria Vesta* 5.2% 82% 100% Fibra Uno 7.0% 32% 58% Prologis Property Mexico 6.2% 79% 76% Terrafina 8.2% 97% 100% * Company is a developer, not a REIT Source: STANLIB Research; BAML Research; HSBC Research, December

9 UAE fundamentals are weak Residential rentals continue to decline due to oversupply Source: HSBC UAE Property Research; October

10 Dubai, UAE Supply continues to increase Source: STANLIB Research, April

11 Philippines: Office demand remains robust Non-BPO industries driving demand Source: Macquarie Turnkey Asia Pacific Property Research, January

12 BPO and POGO tenants driving office demand Demand expanding into peripheral cities outside of Metro Manila Source: STANLIB Research, March

13 Regional and large mall rental growth remains strong Vacancies of small retail centres have increased Mall GLA Pipeline Rental rates expected to creep upwards Source: Macquarie Turnkey Asia Pacific Property Research, January

14 Shopping centres continue to be community centres Entertainment component becoming increasingly important Source: STANLIB Research, March

15 China residential sales remain stable Sell-through rate remains high at +80% Source: BAML China Property Research, April

16 Tier 1 & 2 cities now outperforming Tier 3 & 4 Inventory levels are lower than historical levels Source: Morgan Stanley China Property Research, April

17 Quality players achieving strong sales growth Infrastructure spend stimulating demand and price growth Source: STANLIB Research, April

18 China currently trading in line with historical average Source: Morgan Stanley China Property Research, April

19 Conclusion Upside Risk Healthy EM economic fundamentals Synchronized global economic growth Recovery in commodity prices EM carry trade Growth in China and Europe Downside Risk Aggressive central bank tightening China s growth slows down substantially Weak global demand Global events/shocks Increased trade protectionism 19

20 Thank You

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