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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