QUARTERLY DASHBOARD

GLOBAL LISTED PROPERTY

FIRST QUARTER 2022

SPECIALISTS IN MANAGING
LISTED REAL ESTATE INVESTMENTS

GLOBAL PERFORMANCE SINCE INCEPTION – USD – GROSS OF FEES AS AT 31 MARCH 2022

wdt_ID Fund Annualised Return Since Inception (30 Nov 2007) 10 Year Return Annualised 5 Year Return Annualised 3 Year Return Annualised 2020 2021 Q1 2022
1 Fund Performance 7.62% 8.74% 9.79% 9.23% -3.37% 31.65% -5.58%
2 Benchmark 4.44% 7.36% 6.82% 6.44% -8.84% 28.80% -4.47%
3 Alpha 3.18% 1.38% 2.97% 2.79% 5.47% 2.85% -1.10%

GLOBAL PERFORMANCE SINCE INCEPTION – ZAR – GROSS OF FEES AS AT 31 MARCH 2022

wdt_ID Fund Annualised Return Since Inception (30 Nov 2007) 10 Year Return Annualised 5 Year Return Annualised 3 Year Return Annualised 2020 2021 Q1 2022
1 Fund Performance 13.51% 15.99% 11.72% 9.79% 1.37% 43.06% -13.28%
2 Benchmark 10.17% 14.52% 8.70% 6.98% -4.37% 39.96% -12.26%
3 Alpha 3.34% 1.47% 3.03% 2.81% 5.74% 3.10% -1.02%

Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2022
Benchmark: UBS Global Real Estate Investors Index USD to 31 March 2015; thereafter FTSE EPRA/NAREIT Developed Rental Index Total Return

Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2022
“Global Listed Property” – Combined: UBS then FTSE EPRA/NAREIT Developed Rental Index Total Return
“Global Bonds” – Citi World Global Bond Index (WGBI) All Maturities
“Global Equities” – MSCI Daily TR Gross World USD (TR)
“Global Cash” – Deutsche Bank 3M T-Bill Index

Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2022
Global Listed Property – Combined: UBS then FTSE EPRA NAREIT Developed Rental Index Total Return
Global Property Developers – Combined Developers Index: Global Developers Index TR USD (UREIUDDE) then FTSE EPRA NAREIT Developed non-rental Total Return Index (TENGNU)

The above graph illustrates the long-term performance of real estate companies focused on owning assets for their rental income streams, compared to real estate companies focused on generating earnings through developing and selling properties. Development permissions are often sought, and approvals granted, in prosperous periods where economic conditions and earnings growth are supportive of demand and therefore, development profits. However, in the time from conception to completion of a development, economic conditions may change such that properties are delivered at less favourable times in the cycle. Dedicated developers who develop through full-cycles will at times not achieve their targeted profit margins and may underestimate the appropriate risk premium needed to compensate for development risk.

Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2022
“Global Listed Property” – Combined: UBS then FTSE EPRA/NAREIT Developed Rental Index Total Return
“Global Bonds” – Citi World Global Bond Index (WGBI) All Maturities
“Global Equities” – MSCI Daily TR Gross World USD (TR)

Over the long-term, global listed real estate has been lowly correlated with global bonds and moderately correlated with global equities. Looking at correlations over the past 25 years, listed real estate correlation has been approximately 0.72 with equities, and approximately 0.31 with bonds. This evidences diversification benefits, which enable better risk-adjusted returns over long-term periods when included in a diversified portfolio.

Days to liquidate Fund
Max 20% of daily trade

Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2022

Based on average daily trade and not being more than 20% of the daily trade,
we should be able to liquidate
– 81.34% of the fund in two days, and
– the whole fund within 5 days

While global listed real estate is by no means detached from the economic realities and geopolitical risks the world is currently grappling with, we are still comfortable with the depth and breadth of the opportunity set that the asset class has to offer. Sectors with strong fundamentals, being driven by secular tailwinds and not general economic growth; opex and interest expense that will likely tick up with time, but at a much slower run rate than the cadence of interest rate increases and CPI prints; and a historic record of performing well during periods of high inflation give us comfort to invest in the sector at this time.

On a valuation basis, we currently see slight value in the sector, over and above our hurdle rate, for long term buy and hold investors. The estimated forward FAD (Funds Available for Distribution) yield for the sector is 4.05%. Within the real estate universe, more attractively priced opportunities exist in specific sub-sectors and stocks, providing opportunities for astute active managers to generate additional returns.