Invesco Global Real Estate Securities April 2013

Transcription

1 Invesco Global Real Estate Securities April 2013 This presentation is issued by Invesco Real Estate for Professional Clients in Continental Europe and the UK only and should not be issued to, or relied upon, by other parties. Please do not redistribute this material. INVESCO REAL ESTATE North America: Dallas San Francisco Newport Beach New York Atlanta Europe: London Paris Munich Prague Madrid Luxembourg Asia Pacific: Hong Kong Shanghai Tokyo Seoul Singapore Sydney Beijing

2 Real Estate Securities What are Real Estate Securities? Publically traded real estate operating companies or REITs*, that offer sources of recurring income and potential for long term capital growth. Returns will be generated from the collection of rent and active management and development of commercial real estate assets What makes REITs different? REITs pay little or no corporation tax, subject to certain operating restrictions. Higher levels of income distribution provide a return profile more aligned with direct real estate ownership * REITs - Real Estate Investment Trusts 2

3 Invesco Real Estate Invesco s Dedicated Real Estate Investment Centre $52.6 Billion Under Management* 347 Employees Worldwide; 18 Offices San Francisco Newport Beach New York Atlanta Dallas London Luxembourg Paris Prague Munich Madrid Beijing Seoul Shanghai Tokyo Hong Kong Real Estate Securities Management $22.1 BN Under Management Since 1988 Investment team of 18 professionals Average PM experience of 20yrs Average Analyst experience of 12yrs Singapore Sydney 167 N. America 97 Europe 83 Asia Direct Real Estate Investments $30.5 BN Under Management Since AUM for Real Estate securities as of 31 March 2013; AUM for Direct Real Estate Investments as of 31 December 2012 Source: Invesco Real Estate (IRE)

4 Invesco s Global Real Estate Platform Firm-Wide Collaboration Brings Best Ideas Together United States 12-person global research team facilitates House View process Leverage third-party data sources Add value through internal processes of data assimilation, ground-truthing and proprietary forecasts and tools Western Europe/ Nordics Central & Eastern Europe (CEE) Asia & Australia 125 +/- investment professionals involved Top-down and bottom-up; engaging multiple investment disciplines Deliver recommendations on return expectations, allocation, selection Legend IRE market coverage IRE office/market coverage IRE office/market coverage/research 4 Source: Invesco Real Estate. Data as of 31 March 2013

5 Real Estate Securities Characteristics Daily liquidity and pricing Transparent reporting Immediate diversification Immediate capital deployment Worldwide opportunity Access to real estate franchises Attractive income potential Long-term returns similar to direct real estate investing 5

6 Access to Prime Quality Commercial Real Estate Offices Healthcare Facilities Residential Data Centres Mass Urban Development Schemes Telecom Masts Self Storage Apartments Prime Malls 6

7 Property Type Opportunity Set Benchmark - FTSE EPRA/NAREIT Developed Index Self Storage 3% Retail 24% Diversified 32% Apartment 11% Office 14% Health Care 7% Industrial 5% Lodging 3% Source: Invesco Real Estate estimates, using Bloomberg data and FTSE EPRA/NAREIT as of 28 February 2013.

8 Geographic Opportunity Set Benchmark - FTSE EPRA/NAREIT Developed Index Hong Kong Landlords 4% JREITs 4% Japan Developers 7% Singapore 5% Australia 8% US Apartments 8% US Diversified 5% US Healthcare 7% US Lodging 3% Universe 280 companies 21 countries ~$1.2tr market cap Regional Overview USA = 49% Hong Kong / China Developers 7% US Malls & Retail 11% N.America = 54% Europe = 14% Rest of Europe 5% France 4% UK 5% Canada 5% US Office 5% US Other Sectors 6% Asia = 24% Australia = 8% Plus Out of Index Opportunities in: Brazil, South Africa, India, Indonesia, Malaysia, 8 Source: Invesco Real Estate estimates, using Bloomberg data and FTSE EPRA/NAREIT as of 28 February 2013.

9 Opportunities for Real Estate Mass Urbanisation Trends 9

10 Opportunities for Real Estate Demographic Change % Total Population Over 65 years of Age* World Europe North America Asia 10 * Source: UN: World Population Ageing ** Source: Invesco, FTSE EPRA Developed Index

11 Opportunities for Real Estate: Changing Wealth Distributions Estimate G7 GDP E7 GDP Rapid growth of the middle classes across the emerging world 1 billion new consumers in emerging market cities by 2025* Significant changes in global consumption patterns 11 * McKinsey: Urban World: Cities and the Rise of Consuming, 2012 ** PWC : The World in 2050, January E7 refers to (China, India, Brazil, Russia, Indonesia, Turkey, Mexico)

12 USD Weighted Average Cashflow per Share Listed Real Estate Cashflow Stability & Growth % 11% 10% -2% 0% 8% 9% 8% Forecast Source: Invesco Real Estate estimates based on consensus data as of 28/02/13. 12

13 Dividend Yields Global Real Estate Securities Valuation Metrics Yield Opportunities United States Canada Australia Japan Hong Kong Singapore United Kingdom France Other Source: Invesco Real Estate estimates based on consensus data as of 28/02/13. 13

14 Global Real Estate Securities Valuation Metrics Valuation Metrics (%) Next 12 Months Earnings/Cashflow per Share Growth 25 Next 12 Months NAV per Share Growth 19 Premium/Discount to NAV Per Share at 28/02/ Japan USA Global Australia Canada UK Cont. Europe Singapore -23 Hong Kong Source: Invesco Real Estate estimates based on consensus data as of 28/02/13. 14

15 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Global Real Estate Securities Valuation Metrics Share Price Premium to Estimate of NAV 30% 20% 10% 0% -10% -20% -30% -40% (Global) Share Price Premium/Discount to NAV Avg. Discount = -1.1% 15 Source: Invesco Real Estate as of 31 December 2012 based on internal research.

16 Europe North America Fundamentals in Key Markets North America, Europe & Asia Pacific US Lodging US Apartments US Industrial US Health Care US Retail US Office Rental Growth Slowing Accelerating Rental Growth Falling Rental Values Rents Bottoming Out Central European Office Scandinavian Office German Office Dutch Office UK Office French Office Rental Growth Slowing Accelerating Rental Growth Falling Rental Values Rents Bottoming Out UK Retail UK Industrial European Retail Singapore Retail Shanghai Office Shanghai Retail Hong Kong Retail Australia Office Beijing Office Beijing Retail Tokyo Office Rental Growth Slowing Accelerating Rental Growth Falling Rental Values Rents Bottoming Out Australia Retail Japan Retail Hong Kong Office Guangzhou Office Singapore Office Asia Pacific European Industrial 16 Source: Invesco Real Estate as of 31 December 2012 based on internal research. For illustrative purposes only.

17 Possible Global Return Outlook Real Estate Securities Assumptions No rebalancing Company relative multiples do not change Risk is not added to portfolio FTSE EPRA/NAREIT Developed Index Country 31/12/12 Premium (Discount) to NAV At 31/12/12 Dividend Yield At 31/12/12 Assumed Annual Cash Flow And NAV Growth 5 Year IRR Australia 8.11% 1% 5.6% 4.5% 10.3% UK 5.16% -3% 3.6% 3.0% 7.5% Cont. Europe 8.78% 0% 4.7% 2.5% 7.8% Hong Kong 11.79% -27% 2.5% 6.7% 10.6% Japan 10.84% 7% 2.1% 3.6% 3.9% Singapore 5.07% -7% 3.0% 5.1% 7.9% Canada 5.40% 2% 4.9% 4.0% 9.7% USA 44.68% 12% 3.6% 4.4% 7.5% Global 100% 3% 3.6% 4.3% 7.9% 17 Notes: The above analysis assumes buying the underlying stocks of the FTSE EPRA NAREIT Developed Index at current NAV premium/discount, holding them for a five year period, collecting the current indicated dividend yield. We assume our Cash flow and NAV growth estimates for the holding period. At the end of the 5 year period, the holdings were assumed to be sold at the country s long term average premium/discount. The projected IRR is an Invesco Real Estate estimate for illustrative purposes only. It is not known whether these returns could be achieved and this analysis assumes a static model that does not take into account all potential factors.

18 Investment Philosophy How we add value.. Maximize the predictability and consistency of investment returns Real Estate Fundamentals Risk Controls Securities Analysis Bias portfolios to fundamentally better outcomes Understand and allocate risk at every step of stock selection process and portfolio design 18 For illustrative purposes only

19 Portfolio Construction Process Executing our Philosophy Global real estate securities universe ~ 1050 stocks (Step 1) (Step 2) (Step 3) (Step 4) Invesco s qualified universe (~410 stocks) Real estate analysis (~275 stocks) Securities analysis (~205 stocks) Portfolio construction (~100 stocks) Target Appropriate Investments: Screen for minimum market cap, daily trading volume and appropriate investments Quality Real Estate Bias: Identify better long-term investments from fundamental real estate perspective Better Relative Value via Multiple Alpha Sources: Rate stock according to best relative value using a multi-metric valuation model Allocate Risk to Maximize Return: Create optimal risk/return relationship, allocating within risk budget 19 For illustrative purposes only

20 Portfolio Characteristics As of 31 March 2013 Invesco Real Estate 1 FTSE EPRA/NAREIT Developed Index 2 No. of securities Market correlation (R-Squared) Equity beta Earnings multiple 21.1x 21.1x Expected earnings growth 8.07% 6.04% Multiple to growth ratio 2.61x 3.49x Leverage 36.54% 36.29% Dividend yield 3.23% 3.47% Dividend coverage 1.54x 1.51x Dividend payout 65% 66% Average market CAP $6,651 MM $3,447 MM Invesco s Client Portfolios Generally Exhibit: Fundamentally stronger real estate asset and market exposure Average market risk Higher/ more consistent earnings growth Lower leverage Better dividend coverage Better liquidity 20 1 Represents Invesco s current global real estate securities sample portfolio as of 31 March Sources: FTSE EPRA/NAREIT and IRE as of 31 March FTSE International Limited ( FTSE ) FTSE FTSE is a trade mark of London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under license. All rights in the FTSE Indices vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE Indices or underlying data. Past performance is not a guarantee of future results. The FTSE EPRA/NAREIT Developed Index is an unmanaged index considered representative of global real estate companies and REITs. An investment cannot be made directly in an index.

21 Invesco Global Real Estate Securities Composite Annualized Performance as of 31 March 2013 Annualized Performance (%) Invesco Global Real Estate Securities Composite - Gross of Fees, Net of Withholding Taxes * Invesco Global Real Estate Securities Composite - Net of Fees, Net of Withholding Taxes FTSE EPRA/NAREIT Developed Index - Gross of Withholding Taxes ** FTSE EPRA/NAREIT Developed Index - Net of Withholding Taxes * 20.2** * 13.5** * ** * ** 0 2.5* 2.7** 3 Months 1 Year 3 Year 5 Year Since Inception (30/04/05-31/03/13) This performance presentation of Invesco Global Real Estate Securities Composite is supplemental information to the Global Investment Performance Standards (GIPS ) compliant presentation which is included in the appendix. For net of fee performance and additional disclosures, please see appendix. 21 Further information about Invesco Real Estate, including portfolio composition, size and objective, is available to prospective clients upon written request. A complete list of firm composites and performance results is available upon request. Past performance is not a guarantee of future results. Returns for less than one year are not annualized.

22 Why Consider Real Estate? Strong historical long term performance track record A beneficiary of major global structural changes Source of above average income yield Real asset exposure Why Consider Invesco Real Estate? Independence, platform, experience, Rigorous, quality biased investment process 22

23 Invesco Global Real Estate Securities Fund: Fund facts Domicile Dublin Launch date 29 August 2005 Fund structure Unit type Distribution frequency Base Currency Reference Index Sub-fund of INVESCO Funds Series with UCITS III status Distribution and accumulation Annual USD FTSE EPRA/NAREIT Developed Index Fund classes A (Dist USD) / A (Accum Euro Hedged) C (Accum USD) / C (Accum Euro Hedged) E (Accum Euro) / I (Accum Euro) Initial fee A max 5.25% / C max 5.25% / E max % Annual Management fee A 1.3% / C 0.8% / E 2.25% Minimum investment A USD 2,500 / A (EUR hgd) EUR 2,500 C USD 1m / E EUR 1,500 ISIN code A (Dist USD): IE00B0H1QD09 A (Accum Euro Hedged): IE00B0H1S125 C (Accum USD): IE00B0JBTP12 C (Accum Euro Hedged): IE00B0JBTQ29 E (Accum Euro): IE00B0H1QF23 I (Accum Euro): IE00B127DB75 Fund Objective The objective of the Fund is to achieve long-term capital appreciation and to provide investors with current income at a level which is consistent with the long-term objective of the Fund through investment in a diversified portfolio of global equity and debt securities issued by companies and other entities which derive their revenues from activities related to real estate. The Fund will invest on a global basis and it is intended that most of the Fund's investments will be in North America, Europe and Asia. 23

24 Invesco Global Real Estate Securities Composite Schedule of Investment Performance Gross Net Composite Benchmark Composite Total Rate of Rate of Benchmark 3-Year 3-Year Number of Assets Firm Assets Composite Return (%) Return (%) Return (%) St Dev (%) St Dev (%) Portfolios (USD Millions) (USD Billions) Dispersion (%) , (5.76) (6.51) (5.82) , , , (44.70) (45.14) (47.72) , (4.17) (4.93) (6.96) N/A N/A 9 1, N/A N/A N/A 2005 (8 Months) N/A N/A N/A Annualized Compound Rates of Return Ending December 31, 2012: 1 Year Years Years Since Inception (4/30/05) 24 Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS ) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1st January 2003 thru 31st December The legacy firms that constitute Invesco Worldwide have been verified since 2001 or earlier. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firmwide basis and (2) the firm s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

25 Important Information - continued 25 Past performance is not an indication of future performance, provides no guarantee for the future and is not constant over time. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Where Invesco Real Estate has expressed its own views and opinions, in this presentation these may change. The information in this document is selective and does not constitute an offer or an invitation to subscribe for, or purchase, any securities. Current tax levels and reliefs may change. Depending on individual circumstances, this may affect investment returns. Where securities are mentioned in this document, they do not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase or sell. Telephone calls may be recorded. The performance data shown does not take account of the commissions and costs incurred on the issue and redemption of units. Any reference to a ranking, a rating or an award provides no guarantee for future performance results and is not constant over time. There is potential for increased volatility in emerging stock markets, and only a modest proportion of investable wealth should be invested in them. Investing in funds focused on specific themes, particular areas of the market or small capitalisation companies may increase the risk associated with them due to the volatility and/or the concentrated nature of these investments. As the funds in this presentation are theme-based funds, which invests in global equities and invests in the Asia Pacific region, including Real Estate Investment Trusts and debt securities of real estate related companies, investors should be prepared to accept a higher degree of risk than for a fund with a broader investment mandate. Investors should read the funds simplified and full prospectuses for specific risk factors and further information. This document is not an invitation to subscribe for shares in the funds and is by way of information only. It is not intended to provide specific investment advice including, without limitation, investment, financial, legal, accounting or tax advice, or to make any recommendations about the suitability of the funds for the circumstances of any particular investor. You should take appropriate advice as to any securities, taxation or other legislation affecting you personally prior to investment. Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations.

26 Important Information This presentation is for use by Professional Clients in Continental Europe, the UK and Dubai only and is not for consumer use. Please do not redistribute. This presentation contains confidential information, is for informational purposes only and is not an offering. It does not take into account individual objectives, taxation position or financial needs. Nor does this constitute a recommendation of the suitability of any investment strategy for a particular investor. It is not intended to provide specific investment advice including, without limitation, investment, financial, legal, accounting or tax advice, or to make any recommendations about the suitability of the proposed fund for the circumstances of any particular investor. Prospective investors should take appropriate advice as to any securities, taxation or other legislation affecting them personally prior to investment or if they are unsure if this proposed fund is suitable for them. Asset management services are provided by Invesco Real Estate in accordance with appropriate local legislation and regulation. This presentation does not form part of any prospectus. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without Invesco's prior written consent. General The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Where Invesco has expressed views and opinions, these may change. Issuer details: This presentation is issued in UK by Invesco Real Estate, a division of Invesco Asset Management Limited, 30 Finsbury Square, London, UK, EC2A 1AG, authorised and regulated by the Financial Services Authority. 26