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SEB Real Estate Equity Newsletter



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  • 1. SEB Real Estate Equity Newsletter An SEB Asset Management publication Issue 1/2010 2009 was SEB Real Estate Equity Global’s most successful year ever. Its return of almost 70% was way ahead of its benchmark index. The Investment philosophy EPRA/NAREIT Global Index rose by 34% last year. We are convinced that there is a high correlation between yields on real estate shares and the underlying intrinsic value Listed real estate corporations and 90% and 80% respectively, while of the assets owned by the company REITs experienced a strong price performance on the Australian and concerned. Only an investment process recovery in 2009. On the one hand, Japanese markets was only in the that is benchmark-independent and that this was a reaction to the reversals low single-digit range. combines macroeconomic data and fundamental analysis of real estate experienced in 2008, while on the corporations allows value creation for other the end of the economic slump European real estate shares also investors. and banks’ somewhat less restrictive turned in a solid performance of credit policies also had a positive 36%. French REITs rose by up to effect on real estate shares. 50%, followed by the Netherlands Transparency with 40%. Only in the United For companies and investors, 2009 Kingdom was the trend more muted: We aim to provide maximum was dominated by capital increases British companies recorded relatively transparency by publishing our and refinancing activities. In the low share prices rises of investment matrix every month. This United States alone, REITs raised approximately 15%, reflecting the enables investors to gain an up-to-date almost USD 20 billion in fresh capital scepticism about Britain’s economic picture of the regional distribution of our investments. in this way. Many companies also future. sold off non-core areas, continuing to focus on their home markets and Share prices rallied after US REITs The Fund held no US REITs until core competencies. reached their low for the year in November 2008, after which it March 2009, with index levels steadily built up a holding of almost In the past year, Asian markets once doubling. On an annual basis, 35% by the end of 2009. By contrast, again topped the international American shares ended 2009 up the Fund’s significant exposure to performance charts with share price almost 25%. Southeast Asia, particularly in China gains of 39%. As in the past, though, and Indonesia, and to some there were significant differences in In 2009 as in the past, SEB Real European markets was reduced. This returns between the individual Estate Equity Global systematically resulted in the following positioning in countries. Hong Kong and Singapore followed its benchmark-independent terms of continents compared with saw share prices jump by almost active investment strategy. the EPRA/NAREIT Global Index.
  • 2. SEB Real Estate Equity Newsletter An SEB Asset Management publication 100% SEB Real Estate Equity Global 90% America 80% 70% 60% Asia-Pacific 50% 40% 30% 20% Europe 10% 0% Jul Aug Sep Okt Nov Dez Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan 07 07 07 07 07 07 08 08 08 08 08 08 08 08 08 08 08 08 09 09 09 09 09 09 09 09 09 09 09 09 10 100% EPRA/NAREIT 90% 80% America 70% 60% 50% 40% Asia-Pacific 30% 20% 10% Europe 0% Jul Aug Sep Okt Nov Dez Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan 07 07 07 07 07 07 08 08 08 08 08 08 08 08 08 08 08 08 09 09 09 09 09 09 09 09 09 09 09 09 10 Monthly weightings from July 2007 to January 2010 Source: SEB Asset Management, EPRA Look back on 2009 140 140 The past twelve months were the 130 130 most successful year ever for SEB 120 120 Real Estate Equity Global. Its return 110 110 of almost 70% was almost double 100 100 that of its benchmark index, the 90 90 EPRA/NAREIT Global, and the Fund 80 80 also held its own against other 70 70 comparable products. The Fund 60 caught up part of the losses made in 60 50 2007 and 2008. Since its launch on 6 50 40 March 2006, SEB Real Estate Equity 40 30 Global lost 34.6%, compared to a 30 04 04 6 6 02 02 6 6 01 01 6 6 01 01 6 6 30 30 7 7 28 28 7 7 26 26 7 7 24 24 7 7 24 24 8 8 22 22 8 8 20 20 8 8 18 18 8 8 19 19 9 9 17 17 9 9 15 15 9 9 0 90 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 loss of 27.4% for its benchmark. 3. 3. 6. 6. 9. 9. 2. 2. 3. 3. 5. 5. 8. 8. 1. 1. 2. 2. 5. 5. 8. 8. 1. 1. 2. 2. 5. 5. 8. 8. 1. 1. .0 .0 .0 .0 .0 .0 .1 .1 .0 .0 .0 .0 .0 .0 .1 .1 .0 .0 .0 .0 .0 .0 .1 .1 .0 .0 .0 .0 .0 .0 .1 .1 06 06 SEB Real Estate Equity Global EPRA Global SEB Real Estate Equity Global EPRA Global 2
  • 3. SEB Real Estate Equity Newsletter An SEB Asset Management publication Outlook for 2010 We are optimistic that we will generate additional share price gains for SEB Real Estate Equity Global in 2010. This requires a stable economic environment. The correlation between real estate equity markets and the broad equity indices remains extremely high. This means that stock market setbacks could also impact real estate shares and REITs. This is offset by the fact that many companies still offer attractive fundamental valuations. 2010 will see a further separation of the wheat (among companies) from the chaff. Our research agenda contains questions such as: How will the economy develop; how good is Current positioning of the SEB benchmark-independent bets are in the location of the properties; and Real Estate Equity Global Fund Brazil, India and Thailand. In recent how creditable is the company’s months, the Fund has focused management? The enormous SEB Real Estate Equity Global starts somewhat more on more highly ongoing discrepancy in some 2010 fully invested. The Fund’s capitalised stocks. countries between market continental weighting is currently as capitalisation and fundamental follows: Asia (approximately 42%), The quality of the companies in enterprise values offers additional North and South America (37%), and which we invest will again be a key upside potential. An active stock Europe (20%). The Fund’s focus in factor this year. Healthy balance picking approach, which is superior Asia is on Australia and Hong Kong sheet structures, transparent to pure index tracking in the long (approximately 10% each) and Japan strategies and trustworthy term, remains essential. (approximately 8%). Additional management are essential for an investments were made in India investment. If the markets Even though real estate corporations (5%), Singapore (3%) and Thailand experiences substantial declines the worldwide no longer trade at the very (3%). With some 33% in the US, the course of the year, we reserve the attractive levels seen at the Fund is slightly underweight in right to increase cash holdings in beginning of 2009, price trends show relation to comparative indexes. order to minimise risks. that REITs continue to have potential Brazil accounts for approximately 4% in 2010 from a technical perspective of Fund assets. In Europe, the United as well. As the following chart Kingdom makes up just under 5% of tracking the relative strength of the the Fund, while Fund assets also EPRA/NAREIT Global Index shows, include companies focused on these shares are still far from being France, Finland, Germany and oversold and overvalued. Eastern Europe. The largest 3
  • 4. SEB Real Estate Equity Newsletter An SEB Asset Management publication Country ranking Austria, China, Czech Republic, Germany, Denmark, France, Hong Kong, India, Japan, Australia, Brazil, Malaysia, Norway, Hungary, Italy, Indonesia, Philippines, Poland, Russia, Netherlands, Spain Thailand Singapore, Sweden, USA, UK Denmark, Hungary, Denmarrk, Spain, Poland, Spain Hungary Poland Market assessment Australia, Austria, Brazil, China, Czech Republic, Austria, China, Czech Indonesia, Japan, Republic, Japan, Australia, Brazil, Malaysia, Norway, Malaysia, Norway, Russia, Indonesia, Philippines Philippines, Russia, Singapore, Sweden Singapore, Sweden Finland, France, Germany, Hong Kong, France, UK, Italy, Finland, Hong Kong, India, Italy, Netherlands, Netherlands India, Germany, USA, UK Thailand Thailand, UK, USA Disclaimer This document represents general marketing material. The information contained in this document is provided exclusively for informational purposes and constitutes neither an offer to purchase or sell nor an invitation to submit an offer to purchase or sell the product presented. The sole binding basis for the purchase of investment units is the valid Sales Prospectus in conjunction with the most recent Annual Report and/or Semi-annual Report for the Fund. You can obtain these documents directly from the Internet, at the branches of SEB AG or from your investment adviser. SEB Asset Management AG does not provide advisory services and the information contained in this presentation does not constitute investment advice. The statements made are based on our assessment of the current legal and tax situation. Before purchasing units, potential customers should obtain detailed advice that is tailored to their individual situation from tax, legal and/or investment advisors. Investments in funds entail both opportunities and risks. The market value of an investment may rise or fall. Past returns and performance offer no guarantee for the future; in some cases, losses may exceed the amount originally invested. Exchange rate volatility may affect gains on investments in foreign markets. To the extent permitted by law, no assurance is given that the results and income forecasts contained in this document will be achieved. Equally, to the extent permitted by law, no assurance is given that all assumptions that are relevant for the achievement of the results or income forecasts have been taken into consideration or mentioned. The content of this document is based on public sources that are regarded as reliable. No assurance can be given with regard to the correctness and completeness of the information or of any terms of a future business proposal under the conditions mentioned here. Neither the dissemination of this presentation nor the provision of additional materials gives rise to any duties to provide information above and beyond investment law requirements. In particular, no obligation to correct information that proves to be incorrect ex post is accepted. This information sheet includes financial research material. Your attention is drawn to the fact that this material does not meet all the statutory requirements with regard to guaranteeing the impartiality of financial research and is not subject to the prohibition on trading financial instruments mentioned in financial research before its publication. In this context, your attention is also drawn to circumstances and relationships that, depending on their interpretation, may give rise to conflicts of interest. We have taken internal measures that are designed to minimise the occurrence of conflicts of interest as far as possible. Among other things, these include the integration at the operational level of a neutral compliance function. The dissemination of the information contained here and the offering of the investment units mentioned here is prohibited in a large number of countries unless the Fund management company has notified/received permission from the local supervisory authorities. If no such notification has been submitted/no such permission has been granted, the information contained here may not be regarded as an offer to purchase investment units. Please contact your local sales office if necessary. This product may not be purchased by persons in the USA. The purchase of this product entails costs/fees. The front-end load primarily represents remuneration for the sale of Fund units. The Company pays regular – usually annual – brokerage fees ("trail commission") to brokers such as credit institutions. SEB Asset Management AG, Rotfeder-Ring 7, 60327 Frankfurt am Main, Infoline: 0180 1 777 999 (dt. Festnetz 3,9 ct./Minute; Mobilfunkpreise abweichend),, E-Mail: (January 2010) 4