Retail, Hotel Recover in June; Double-Digit Gain For Asia Pacific REITs In Q2

Hong Kong’s Jinmao Hotel and Wharf RELC up on privatization news

By Jeroen Vreeker, Index Analyst, Global Property Research

Healthcare, office and residential sectors posted losses in June while hotel and retail continued to recover.

Among the hotel gainers in the month was Jinmao Hotel Investments and Management, which had proposed on June 19 a privatization of the company by way of a scheme of arrangement. The shares last traded at HK$4.64 as at the end of June, just below the HK$4.80 China Jinmao will pay for each stapled units. The units nearly doubled in the month.

In the retail sector, Wharf Real Estate Investment Company (RELC) was up 24% in June. The company is 66.5% owned by Wheelock & Co, which is to be privatised. The company will distribute one Wharf and one Wharf REIC share for every one share in the company.

The table below shows the sector performances based on the GPR/APREA Composite REIT Index, which covers 167 Asia Pacific REITs. The index had a combined free-float market capitalisation of US$257.9 billion as at June 30, 2020.

HealthCare (-2.9%), Office (-1.4%) and Residential (-0.5%) contracted while Diversified (0.4%), Retail (1.7%), Hotel (2.3%) and Industrial (2.9%) were up:

	DIV	HCR	HOT	IND	OFF	OTH	RES	RET
GPR/APREA Composite REIT Index	0.4%	-2.9%	2.3%	2.9%	-1.4%	n/a	-0.5%	1.7%

The index closed the second quarter 13.3% higher. It was up 0.8% in June 2020, following gains of 7.3% and 4.8% in April 2020 and May 2020 respectively.

The table below shows the total return performances realised in the previous month for the various currencies available.

	EUR	JPY	LOC	USD
GPR/APREA Composite REIT Index	-0.2%	0.9%	-0.5%	0.8%

In the broader country markets, Hong Kong REITs recovered from the -13.6% loss suffered in May 2020 and posted the biggest win in June 2020. Most other countries realised gains as well, ranging from 1.1% for Singapore to 2.8% for Australia. Japan (-1.9%) and Thailand (-4.2%) were the only two countries contracting.