QuotedData’s Real Estate Monthly Roundup – December 2024

Richard Williams

Winners and losers in November 2024

Best performing funds in price terms	(%)
Alpha Real Trust	9.5
Globalworth Real Estate	8.5
Residential Secure Income	5.3
IWG	4.5
Custodian Property Income REIT	3.2
Grainger	3.1
Value & Indexed Property Income Trust	1.9
Hammerson	1.8
Workspace Group	1.8
Supermarket Income REIT	1.3

Source: Bloomberg, Marten & Co

Worst performing funds in price terms	(%)
Grit Real Estate Income Group	(17.6)
CLS Holdings	(12.3)
Life Science REIT	(12.2)
Conygar Investment Company	(11.5)
Big Yellow Group	(11.3)
Real Estate Investors	(8.8)
Safestore	(8.0)
Ground Rents Income Fund	(7.6)
Target Healthcare REIT	(7.4)
Urban Logistics REIT	(7.3)

Source: Bloomberg, Marten & Co

Best performing funds

Real estate share prices settled somewhat in November but were still down 1.4% on average having declined almost 5% in October, as the impact of the budget raised the potential for a higher-for-longer interest rates environment. There was an eclectic mix of positive share price movers in the month, led by real estate debt specialist Alpha Real Trust. month end, the company announced that it would seek to delist, offering minority shareholders a tender offer at  Residential Secure Income saw its share price trend upwards for a second consecutive month after announcing a proposed managed wind-down in October. Custodian Property Income REIT’s quarterly valuation update shows that values may have turned a corner (see the valuation moves section below), highlighting that its shares may be too cheap. Hammerson’s c operational and balance sheet strengthening, including the launch of a £140m share buyback programme, seems to be gaining traction with investors. The reaction to the proposed change in the basis of Supermarket Income REIT’s management fee (from NAV to share price – see corporate news section) has been surprisingly muted.

Worst performing funds

Potentially higher-for-longer interest rates resulted in many of the highly leveraged or rate sensitive companies suffer once again. Grit Real Estate Income Group, which has a high cost of borrowing, contin ued to lose value as its share price plummeted another 17.6% over the month, and it has halved in size over the 11 months of 2024. The African real estate developer and investor now has an astonishingly low market cap of around £50m, despite owning a freshly capitalised development partner with lucrative US Embassy-backed diplomatic housing projects in the pipeline. Fellow perennial 2024 share price victims CLS Holdings and Life Science REIT also recorded double-digit declines in November. Office landlord CLS faces a tricky few months with several loans due to mature in 2025. Meanwhile, interest rate hedges in place on debt that Life Science REIT is using to develop its flagship scheme expire next year. The two self-storage operators, Big Yellow and Safestore, both suffered as fears for subdued economic growth and a floundering housing market grew.  Ground Rents Income Fund made significant progress in its strategy to sell down assets with the sale of its largest holding (see the news section).  

Valuation moves

Company	Sector	NAV move (%)	Period	Comments
Care REIT	Healthcare	0.6	Quarter to 30 Sept 24	1.0% like-for-like increase in property portfolio valuation to £672.1m
Custodian Property Income REIT	Diversified	0.4	Quarter to 30 Sept 24	Value of the company’s portfolio was £582.4m, an increase of 0.5% on a like-for-like basis
abrdn European Logistics Income	Europe	(0.3)	Quarter to 30 Sept 24	Portfolio valuation remained stable at €607.5m
Triple Point Social Housing REIT	Residential	(1.4)	Quarter to 30 Sept 24	0.9% decrease in the valuation of the company’s property portfolio
abrdn Property Income Trust	Diversified	(11.3)	Quarter to 30 Sept 24	Reduction reflects price agreed on sale of company’s portfolio
AEW UK REIT	Diversified	6.2	Half-year to 30 Sept 24	Value of portfolio up 2.3% to £215.6m
Warehouse REIT	Industrial	2.5	Half-year to 30 Sept 24	Like-for-like portfolio valuation up 2.3% to £811.3m
LondonMetric Property	Logistics	2.1	Half-year to 30 Sept 24	0.7% property valuation increase to £6.2bn
Land Securities	Diversified	1.4	Half-year to 30 Sept 24	Portfolio valuation up 0.9% to £9,957m
Sirius Real Estate	Europe	1.2	Half-year to 30 Sept 24	Marginal valuation uplift to €2,349.0m
Schroder REIT	Diversified	1.0	Half-year to 30 Sept 24	Portfolio valuation increased by 0.9% to £465.5m
British Land	Diversified	0.9	Half-year to 30 Sept 24	Values up 0.2% to £8,867m
Alpha Real Trust	Debt	0.7	Half-year to 30 Sept 24	Uplift in earnings from high return debt
Picton Property	Diversified	0.3	Half-year to 30 Sept 24	Like-for-like portfolio valuation increase of 0.8% to £721m
Assura Group	Healthcare	0.2	Half-year to 30 Sept 24	Portfolio valued at £3.1bn following private hospital portfolio buy. Remainder of portfolio flat
Helical	Offices	0.0	Half-year to 30 Sept 24	Valuation uplift of 1.3% to £371.9m
Urban Logistics REIT	Logistics	(1.4)	Half-year to 30 Sept 24	Value of portfolio up 0.2% on like-for-like basis to £1.14bn

Source: Marten & Co

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If instead of starting the Snowball with Investment Trusts the cash was used to buy VWRP, an accumulation world tracker, today the 100k would be valued at 132k and would buy an annuity of around 9.2k.

The Snowball’s fcast for 2025 is £9,120.00 similar to VWRP but with a lot less risk, also you would retain your cash to pass on to your nearest and dearest. I’ll use VWRP as the control share and update as next year unwinds.

Remember, when you want to enter your de-accumulation stage annuities may have fallen.

Canada Life figures show the 65-year-old with a £100,000 pension pot could buy an annuity linked to the retail price index (RPI) that would generate a starting annual income of £3,896. That’s up from £2,195 in the New Year following a 77% spike in rates this year.
Oct 22

The Nasdaq’s almost doubled in the past 2 years! Here’s what I think happens next.

Jon Smith explains why the Nasdaq’s done so well recently and flags up a specific stock he thinks could keep rallying.

Posted by

Jon Smith

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

On Wednesday (11 December), the Nasdaq index closed above 20,000 points for the first time ever. Of course, investors will likely be aware that US stocks have done much better than on this side of the pond in 2024.

Yet it’s interesting to note that thanks to the gains from yesterday, the index is close to being up 100% in two years. That’s some insane growth and I’m keen to dig deeper to see if the party can keep going.

Putting the jigsaw together

First let’s drill down into the numbers. On 28 December 2022, the index closed at 10,213 points. At the moment, it’s at 20,034 points. Yesterday, it gained 347 points, so if it was to replicate that again today, it would be up almost 100% since 2022.

To understand why this is so impressive, it’s key to understand the make up of the Nasdaq composite index. It’s an index that measures the performance of over 3,000 securities listed, with a heavy focus on technology shares. It has a market-cap weighting, meaning that larger companies have a larger impact on the movement of the index. It’s no real surprise that companies like Nvidia, Apple and Microsoft are some of the largest constituents.

From that understanding, I can piece together why the index has produced such large gains. Over the past two years, tech has been the standout sector in the market. The rise of artificial intelligence (AI) has been a key theme for 2024, alongside chipmaking and cloud computing. Vast investor money has poured into these stocks.

Direction from here

I think it’s only natural that at some point in the coming months there will be a likely correction in the Nasdaq. This is healthy and would see investors book some profits. The average price-to-earnings ratio for the index is 47.7. This is far above the benchmark figure of 10 that I use for a fair value. So the stretched value could see some investors a little spooked in the short term.

Yet after any potential pullback, I still see the long-term trend being higher for some key members, which should act to push the overall index up as well. For example, I hold shares in Tesla (NASDAQ:TSLA). The stock’s up 79% in the past year.

Despite the surge, I feel it has fundamental drivers that should help it grow in the next couple of years. This includes the benefits from the new US President, who’s likely to champion domestic firms like Tesla over international rivals. Plans on easing corporate red tape and deregulation should also help the business.

Add into the mix the fact that key progress is being made with autonomous driving and robotics at the firm. As Tesla keeps adapting to the future, I feel investors get more confident in buying more.

Of course, Tesla’s facing much greater competition in the electric vehicle (EV) space than ever before. This will make it harder to keep profit margins as high as they are going forward.

So although I would be cautious about buying Nasdaq index trackers right now, I do feel that any dip can be used to buy selective index members. For example, if Tesla shares moved lower, I’d look to buy more.

£20,000 in the FTSE All-Share at the start of 2024 ? Here’s what an investor would have now

Our writer looks at whether tracking the FTSE All-Share index has been a great investment this year. Spoiler: there’s good and bad news.

Posted by Paul Summers

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

As starter portfolios go, I think UK investors could do worse than consider buying a fund that tracks the return of the FTSE All-Share index. In addition to getting exposure to our biggest companies, a fund like this also gives access to smaller firms that have the potential to grow at a faster clip.

Let’s take a closer look at how this index has performed so far this year.

A solid year

As I type (12 December), the All-Share is up 7.7%. This is almost identical to the FTSE 100 and very slightly more than the FTSE 250. Put another way, a £20,000 investment — the maximum one could make into a Stocks and Shares ISA — would now be worth £21,540.

Actually, the result would be even better than that because I haven’t taken into account the impact of dividends. Right now, the yield sits around 3.6%.

For simplicity’s sake, let’s assume that it was the same value in January. This would amount to an extra £720 on that original £20,000 investment.

Of course, there’s always a temptation to spend that money.But reinvesting it would increase the amount that compounds over time. Over many years, that could make an enormous difference to our investor’s wealth.

But here, we hit a snag.

Better buy

As respectable as a 7.7% gain is, it pales in comparison to what the main index in the US market — the S&P 500 — has managed to achieve over the same period.

An investor putting that £20,000 to work ‘across the pond’ will have seen their money grow by an astonishing 28% in 2024 so far. Instead of having £21,540, they’d have somewhere in the region £25,600. Yikes!

Given this, how can it make sense to keep holding an All-Share tracker?

What goes up…

Well, an awful lot of the S&P 500’s outperformance is down to small band of tech titans like Nvidia, Apple and Tesla.

Elon Musk’s electric car company, in particular, has done brilliantly. Its shares have climbed over 70% year-to-date. This is despite the firm missing analyst expectations on revenue earlier in the year and seeing margins squeezed as competition with Chinese rivals stepped up a gear down to the CEO’s burgeoning friendship with Donald Trump. Investors clearly believe that the latter will do everything he can to protect and boost business for the EV-maker. Think tax cuts and de-regulation for self-driving vehicles.

The question, however, is whether this performance will continue into 2025. Personally, I’m not sure it can. Tesla’s valuation can only go so high before even the most bullish investors can’t stomach buying. And that’s before we’ve even considered how geopolitical events may impact sentiment.

Buy British?

In such a scenario, we might see more investors wanting to spread risk and get exposure to parts of the world that look cheap in comparison. That surely includes our very own UK stock market!

With this in mind, considering an All-Share tracker makes sense to me.

Sure, the value of this fund can always fall in tandem with the S&P 500. But diversifying away from the US might offer investors a slightly stronger safety net in the event of 2025 being a horrible year for markets (and Tesla shares).

The Snowball is currently earning £25.00 a day, including weekends and holidays, not dependent on the direction of the market.

There is currently £2,247.00 cash and xd income to be added to the Snowball when received. GRS

Warren Buffett: Find A Way To Make Money While You Sleep, Or Work Until You Die – How To Jumpstart Your Passive Income

Kevin Vandenboss

Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, once famously said, “If you don’t find a way to make money while you sleep, you will work until you die.” This quote perfectly encapsulates the importance of creating passive income streams that can work for you even when you’re not actively engaged in earning money.

Buffett’s advice is not just a catchy soundbite; it’s a fundamental principle that has guided his investment strategy for decades. One of the best examples of how Buffett has mastered the art of making money work for him is his investment in Coca-Cola Co. 

Berkshire Hathaway first began acquiring shares of Coca-Cola in 1988 and continued to invest until 1994, amassing a total of 400 million shares for $1.3 billion. Today, that investment is set to pay out a staggering $776 million in dividends this year alone, representing a yield on cost of 59.7%. This means that Buffett’s original investment in Coca-Cola is now generating an annual return of nearly 60%, without any additional effort on his part.

Coca-Cola’s impressive dividend performance is a testament to the company’s strong history of consistent dividend increases. With a current dividend yield of 3.08%, an annual payout of $1.94 per share, and a payout ratio of 68.32%, Coca-Cola has maintained a 5-year dividend growth rate (CAGR) of 3.50% and has increased its dividends for an impressive 61 consecutive years.

LWDB is a very interesting share for Dividend Hunters. If you want to research the Trust type LWDB in the search box and read the blog articles on the Trust.