QUARTERLY DASHBOARD

GLOBAL LISTED PROPERTY

FIRST QUARTER 2021

SPECIALISTS IN MANAGING
LISTED REAL ESTATE INVESTMENTS

GLOBAL PERFORMANCE SINCE INCEPTION – USD – GROSS OF FEES AS AT 31 MARCH 2021

Annualised Return Since Inception (30 Nov 2007) 10 Year Return Annualised 5 Year Return Annualised 3 Year Return Annualised 18 Months Ended 31 March 2021
Fund Performance 6.80% 7.56% 5.41% 8.00% 1.92%
Benchmark 3.58% 6.19% 3.48% 5.53% -2.61%
Alpha 3.22% 1.37% 1.93% 2.47% 4.53%

GLOBAL PERFORMANCE SINCE INCEPTION – ZAR – GROSS OF FEES AS AT 31 MARCH 2021

Annualised Return Since Inception (30 Nov 2007) 10 Year Return Annualised 5 Year Return Annualised 3 Year Return Annualised 18 Months Ended 31 March 2021
Fund Performance 13.16% 16.31% 5.51% 16.24% -0.82%
Benchmark 9.76% 14.83% 3.57% 13.58% -5.24%
Alpha 3.40% 1.48% 1.94% 2.66% 4.40%

Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2021
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 2021
“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 2021
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 2021
“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 0.71 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.

We currently see the listed real estate sector as attractively priced on expected total return spreads. The estimated forward FAD (Funds Available for Distribution) yield for the sector is 4.27%. Based on our earnings estimates and market break-even inflation expectations, we expect the listed real estate sector to deliver at least 5% real return for buy and hold investors over the medium term. Within the listed real estate universe, more attractively priced opportunities exist in specific sectors and stocks, providing opportunities for astute active managers.