This is a financial promotion for The First Sentier Global Property Securities Strategy. This information is for investors in the UK and EEA and elsewhere where lawful. Investing involves certain risks including:
- The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back significantly less than the original amount invested.
- Currency risk: Changes in exchange rates will affect the value of assets which are denominated in other currencies.
- Single sector risk: Investing in a single sector may be riskier than investing in a number of different sectors. Investing in a larger number of sectors helps spread risk.
- Single country / specific region risk: Investing in a single country or specific region may be riskier than investing in a number of different countries or regions. Investing in a larger number of countries or regions helps spread risk.
- Charges to capital risk: The fees and expenses may be charged against the capital property. Deducting expenses from capital reduces the potential for capital growth.
- Property securities risk: Investments are made in the shares of companies that are involved in property (like real estate investment trusts) rather than property itself. The value of these investments may fluctuate more than actual property.
- Emerging market risk: Emerging markets may not provide the same level of investor protection as a developed market; they may involve a higher risk than investing in developed markets.
For details of the FCA authorised firms issuing this information and any funds referred to, please see Terms and Conditions and Important Information below
For a full description of the terms of investment and the risks please see the Prospectus and Key Investor Information Document for each Fund.
If you are in any doubt as to the suitability of our funds for your investment needs, please seek investment advice.
Property markets are constantly evolving – and so are the investment opportunities.
Based in some of the world’s most vibrant property markets, our team blends global analysis of the trends redefining the way we live and work, together with local perspectives of how this plays out for each stock. With a focus on preventing capital loss (which is of course not guaranteed), we invest in well managed assets in high barrier to entry markets in many of the world’s bustling cities.
From office and residential property through to logistics, self storage and data centres, property securities have the potential to offer investors a liquid* and diversified exposure to real property assets – and their return profile.
Why invest with us?
Share price returns in real estate are driven by a combination of fundamental economic and financial factors at a local real estate level as well as broader market conditions. Due to the fundamentally localised nature of real estate, returns from property across different regions have historically been characterised by low levels of correlation, and by a lack of uniformity. This phenomenon can lead to pricing anomalies – presenting opportunities to generate excess returns.
Our portfolio can provide access to property assets such as:
Central business district and suburban office buildings
Super-regional / regional / sub-regional and convenience shopping centres
Residential investment and development
Global team – local experts
We believe that having specialist property investors in each region is the most effective way to manage a global property securities portfolio.
As such, the team’s highly experienced regional specialists are based across the world’s major property markets to provide on-the-ground research and knowledge that allows them to assess the risks and opportunities in the asset class.
Under the leadership of Stephen Hayes, the global property securities team consists of seven portfolio managers and three analysts, all of whom are focused solely on investing in publicly traded realestate securities.
They have a full understanding of stock specific risks, of the wider real estate market and of the macroeconomic conditions that can influence returns.
Data centres - tapping internet growth via listed property
Investing in listed property stocks that own data centres - the specialist buildings which house the infrastructure required to power modern internet usage – gives investors access to one of the greatest structural shifts of our time.
Reliable data centres are expensive to build which means that the supply of new centres is well controlled. A turn-key data centre in the US can cost twice as much as an office tower to build.
This cost reflects the highly specified plant and equipment required for the data centre to have virtually no risk of down time in operations.
Data centres have a wide range of business models appealing to a diverse range of customers - from governments to telecommunication companies to vast internet-centric firms.
With the industry thematic of a high rate of adoption of the internet, together with the large growth in cloud computing, data centres with the right business model can deliver high cash flows well into the future.
Data Centres - Total Operational Floorspace
Source: 451 Research and Digital Realty
Build to rent boom
With accelerating tenant demand now an established long-term trend, the supply of purpose-built rental accommodation has failed to keep up with vacancy rates that are very low in most global cities*.
Strong house price inflation has affected housing affordability. Purpose-built, professionally owned and managed residential rental properties are emerging, with luxury amenities like gyms, community facilities, parcel delivery and even child care being included.
Within the ‘residential for rent’ asset class, cash flows have proved stable through economic cycles, with occupancy levels typically remaining high through periods of economic slowdowns. Rents are correlated to employment and wages growth, demographic trends and supply levels. From an institutional investment perspective, we believe the returns have been competitive.
* The vacancy rates for residential real estate is 7.2 % in Paris as of December 2019 and 3.9% in New York as of June 2020. Over the past 3 years, house price inflation in London, Paris and New York has been 2.2% (to 31 March 2020), 17.3% (to 31 May 2020) and 8.7% respectively (31 March 2020). Source: The National Institute of Statistics and Economic Studies, U.S. Census Bureau, HM Land Registry, Federal Reserve Economic Data (S&P/Case-Shiller NY-New York Home Price Index).
U.S. Household Formation vs Total Housing Completions
Source: US Census Bureau
Investing in student accommodation - assets to hold through all market conditions
While most sectors suffer in times of high unemployment, history has shown us the education sector attracts increasing enrolments as consumers look to bolster their employability. For property investors, this recession-proof demand combined with strong growth in student numbers means student accommodation has the potential to offer less economically sensitive returns, as well as diversification from commonly held equities.
There were over 5.3 million international students in 2017, reflecting an uplift of more than 150% since 2000 (UNESCO 2019). 75% of the top 20 most highly rated universities are located in the United States and the United Kingdom. Unsurprisingly, demand for places is strongest at these highly rated institutions. The top 10 British universities have grown their student numbers by 50,000 since 2012, accounting for 42% of all enrolment growth. Student accommodation in the United Kingdom remains a drawcard for international students.
Source: First Sentier Investors. Data as at September 2019.
Liquidity refers to the speed and ease with which financial assets can be sold in the market without dramatically affecting the price. Highly liquid assets are quickly sold with little-to-no price impact; highly illiquid assets may take a long time to sell and cause a large shift in price.