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Global real estate securities traded lower during the fourth quarter of 2016, with our benchmark (GPR 250 REIT Index) down 5.45%, taking the calendar year total return to 6.5% in USD. Lower trending bond yields during the first seven months of 2016 provided a tailwind however, the sharp rise in 4Q16 after the US elections negatively impacted the overall performance.
According to research by real estate experts GreenStreet Advisors (GSA), property investors have historically been assessing demand growth metrics incorrectly. The focus has been on: Population growth Employment growth Income growth However, the emphasis should be on income growth on a per capita basis. Income per capita combined with changes in supply are the key to determining real estate fundamentals.
This article highlights the effectiveness of active managers in the REIT space relative to their equity and fixed income manager counterparts and will hone in on this outperformance and where the advantage most likely stems from.
If you're thinking of investing in a fund and are looking for a good fund manager, here are five tips on what to look out for and what to avoid. Click here to read the article on Sharenet (Source: Sharenet Marketviews)  
Global REITs, in US Dollar (USD) total return (TR) terms, retreated by 0.1% in 3Q16. This brings the year-to-date (YTD) TR of the global REIT market to 12.6%. Unsurprisingly, once again it was a potential US Federal Reserve (Fed) rate hike that saw bond yields spike and the global REIT market drop in the period leading up to the Fed’s 16 September policy interest rate decision. As indications became clearer that the Fed was not going to hike in September, bond market yields compressed and global REITs recovered in concert. The following chart of global REITs versus the US 10-year…
Global listed real estate is an increasingly attractive investment. Over the last few years, South African investors have grown increasingly aware of the benefits of investing offshore. Diversifying away from local risks, and gaining exposure to different markets and income streams has become an integral part of any investment plan. Click here to read the article on Moneyweb (Source: Moneyweb)
Windstream Holdings, a communications company formed in 2006 by the merger of Alltell and Valor Communications, acquired 9 companies within 8 years. This rapid growth led to a substantial rise in debt which, together with increasing competition from other telecommunications companies, impacted their ability to service their obligations. It became apparent that something significant had to be done.
The home country bias The International Journal of Economics and Finance states that “in order to reduce portfolio risk, investors should hold nationally and internationally well diversified portfolios.” The same source also cites international portfolio theory that in terms of portfolio construction, international diversification should take higher precedence over diversification within respective national markets. However, investors persistently overweight their allocations towards domestic assets. This is known as the “equity home bias.”
Franklin D. Roosevelt observed that real estate cannot be lost or stolen, nor can it be taken away. He also noted that real estate purchased with common sense, paid for in full, and managed with reasonable care, is the safest investment in the world. Commercial property is often targeted as a means of accumulating wealth and generating a secondary income. However, “paid for in full” is not something we necessarily agree on, as FDR is missing a key advantage of owning property in his statement, that being the use of debt to leverage returns. {phocadownload view=file|id=98|text=Click here to download the…