This article is from the Australian Property Journal archive
GLOBAL listed real estate rebounded in May, underpinned by gains in Europe and Americas, whilst Australia underperformed.
According to the latest Global Property Research data, the GPR 250 Index rose by 2.6%.
The result is the listed real estate securities index’s second-best monthly performance this calendar year.
Despite the rebound, listed real estate underperformed broader equities (4.1%).
The performance across listed real estate was mixed across global markets with Europe leading the way with gains of 4.9% followed by Americas with 4.5%.
They were the outlier outperformers, with Africa coming in a distance third at 0.4%.
Oceania (Australia) total returns were -0.9% and Asia significantly underperformed with -4.8%.
Over the six months, Australia listed real estate returns were 8.4% but year to date was -2.0%. In comparison, global equities returns totalled 15.8% and 11.1% respectively, over the same period.
In Australia, the month of May was characterised with property players pulling out of overseas markets and repatriating capital back to Australia.
The most high profile was Lendlease, which will write down up to $1.48 billion to divest its troubled $4.5 billion global construction business. The property giant didn’t waste time, immediately disposing its United States operations to US construction firm Consigli.
But the bad news kept coming from Lendlease, it revealed at the end of the month that it could take a profit hit of up to $160 million from the delayed $1.3 billion sale of the residential communities to Stockland and Thailand investor Supalai.
After closing the month of April with a share price of $6.47, Lendlease ended the month of May at $5.96, its year-to-date performance is -20.82%.
Lendlease wasn’t alone, Cromwell also announced it is exiting its troubled European business, selling its Polish shopping centres portfolio to Prague investor SCF for $465 million.
This followed a sale of its 50% share in a joint venture retail asset in Ursynów, Poland earlier this year to its JV partner for $69 million, and a 50% stake of its Italian logistics fund assets for $91.4 million to Hong Kong-based asset manager Value Partners Group.
Cromwell followed up with the sale of its fund management platform and interests in the continent, including the Cromwell Italy Urban Logistics Fund and €2.2 billion Cromwell European REIT, to Stoneweg for $457 million.
It was quieter on the merger & acquisitions front, with Aspen Group’s takeover bid knocked back repeatedly by Eureka Group Holdings. With the bid expired, Aspen is now looking for a seat on the board of Eureka and is seeking changes to the management.
Elsewhere around the world, In Europe, listed real estate returns soared 4.9% in May 2024, further to which the year-to-date total return performance was brought to 1.5%. Within the continent, Spain (8.1%), Germany (7.8%), United Kingdom (6.2%), Belgium (6.0%) and France (5.1%) were the star performers.
On the other hand, Israel (-5.2%), Finland (-3.1%) and Switzerland (-0.7%) underperformed.
In Americas, the index rebounded from its 6.5% loss in April 2024, gaining 4.5% with Canada (0.5%), Mexico (1.0%), Brazil (3.1%) and United States (4.7%) all in positive territory.
Finally the worst performer Asia with -4.8% return, with the exception of Singapore (0.3%), it was a sea of red across China (-0.9%), Hong Kong (-4.4%), India (-1.4%), Japan (-6.1%).
Asia listed real estate securities underperformed Japan Bonds (0%) and Asia Pacific equities (1.3%) over the month.
