The Third Avenue International Real Estate Value Fund has released its quarterly report for the period ending March 31, 2024. Despite a return of -1.7% (after fees) compared to the FTSE/EPRA NAREIT Global ex US Index’s -2.43%, the Fund has performed well in the past year. The Fund generated a return of +8.59% (after fees) in contrast to the Index’s +4.49% (before fees) over the past year. Over the last three years, the Fund has consistently outperformed the Index by an average of 8.5% annually.
During the quarter, Fund Management attended conferences and met with senior executives from nearly half of the Fund’s holdings. This due diligence reaffirmed their belief that the Fund owns the best-positioned international real estate entities. Three key investment themes identified were nearshoring growth, undersupplied residential markets in Western regions, and emerging self-storage platforms. Let’s explore these opportunities in more detail.
Nearshoring Growth: An Advantageous Position
Nearshoring in Mexico has resulted in high tenant demand that surpasses new supply. Public companies held by the Fund are well-positioned to benefit from the rental growth and attractive profits on new development. Although high interest rates pose a risk, industrial cap rates are decreasing as institutional demand for assets increases. Terrafina, a public industrial REIT, is even considering privatization or merger due to its growing popularity.
Similar nearshoring trends can also be observed in Central and Eastern Europe. CTP, a Netherlands-listed industrial owner and developer, has experienced significant rent increases and decreased construction costs in the region. These factors are contributing to the development profits of CTP’s extensive pipeline.
Undersupplied Residential Markets: A Political Challenge
In Western regions such as Australia, Canada, Ireland, the UK, and Spain, the supply-demand imbalance is becoming politically problematic. Migration and subdued construction have resulted in a shortage of housing, driving rent growth and increasing home values. Alberta, Canada, has seen careful rent control to maintain low turnover and minimize tenant friction.
In Spain, affordable home prices have led to a thriving new home construction market. Aedas Homes, one of the Fund’s investments, is unlocking significant value in its landbank by bringing new supply to the market. The UK’s institutional multifamily sector also presents growth opportunities, with Grainger targeting a doubling of earnings in the next three years.
Emerging Self-Storage Platforms: Untapped Potential
Outside of the US, the self-storage real estate market remains relatively underdeveloped. With low supply and potential for increased demand, various advancements such as contactless leasing and AI deployment are improving operating margins. Larger platforms like National Storage REIT, Big Yellow Group Plc, Storage Vault, and Shurgard Self Storage Ltd. are reaping the benefits of economies of scale and platform synergies.
Shurgard’s recent acquisition of Lok N Store in the UK further solidifies its market position. The Fund’s investments in self-storage development across the UK, Western Europe, Australia, and Canada are expected to generate attractive yields.
Conclusion
The Third Avenue International Real Estate Value Fund has identified promising opportunities in nearshoring growth, undersupplied residential markets, and emerging self-storage platforms. Despite short-term fluctuations, the Fund has consistently delivered strong performance compared to the Index. By strategically investing in these sectors, the Fund aims to capitalize on the potential for growth and generate favorable returns for its shareholders.
第三大道国际房地产价值基金发布了截至2024年3月31日的季度报告。尽管在费用后的回报率为-1.7%，而FTSE/EPRA NAREIT全球除美国指数为-2.43%，但该基金在过去一年中表现良好。该基金在过去一年中创造了+8.59%的回报率（在扣除费用之前），而指数在扣除费用之前的回报率为+4.49%。在过去的三年中，该基金的回报率平均每年超过指数8.5%。
在本季度，基金管理层参加了会议，并与基金持有的近一半公司的高级管理人员进行了会面。这个尽职调查重新确认了他们的信念，即该基金拥有最佳地位的国际房地产实体。其中确定的三个关键投资主题是近岸增长、西部地区住宅市场供应不足和新兴自存储平台。让我们详细探讨一下这些机会。
近岸增长：有利位置
在墨西哥，近岸业务导致的租户需求超过了新供应。基金持有的上市公司在租金增长和新开发的利润上处于有利位置。尽管高利率构成风险，但随着机构对资产的需求增加，工业资本化率正在下降。甚至有公众工业房地产投资信托Terrafina考虑由于其不断增长的受欢迎度而私有化或合并。
在中东欧地区也可以观察到类似的近岸趋势。荷兰上市的工业产权所有者和开发商CTP在该地区经历了显著的租金上涨和建筑成本降低。这些因素为CTP的广泛项目组合的开发利润做出了贡献。
住宅市场供应不足：政治挑战
在澳大利亚、加拿大、爱尔兰、英国和西班牙等西方地区，供需失衡变得在政治上成为问题。移民和抑制建筑导致住房短缺，推动租金增长和房价上涨。加拿大的阿尔伯塔省出台了谨慎的租金控制政策，以保持低换手率和最小化租户摩擦。
在西班牙，可负担的房价导致了蓬勃发展的新房建筑市场。该基金的投资之一Aedas Homes通过向市场提供新的供应来释放其土地储备的显著价值。英国的机构多户住宅部门也提供了增长机会，Grainger计划在未来三年内使收益翻倍。
新兴自存储平台：未挖掘的潜力
在美国以外的自存储房地产市场仍相对不发达。低供应和潜在的需求增加，诸如无接触租赁和人工智能部署等各种进展正在改善运营利润率。像National Storage REIT、Big Yellow Group Plc、Storage Vault和Shurgard Self Storage Ltd.这样的大型平台正在从规模经济和平台协同效益中获益。
Shurgard最近收购了英国的Lok N Store，进一步巩固了其市场地位。该基金对英国、西欧、澳大利亚和加拿大自存储开发的投资预计将产生可观的收益。
结论
第三大道国际房地产价值基金在近岸增长、住宅市场供应不足和新兴自存储平台上发现了有前景的机会。尽管短期波动，但该基金相对于指数始终表现出色。通过在这些领域进行战略投资，该基金旨在利用增长潜力并为股东产生有利回报。
相关链接：
– 第三大道国际房地产价值基金官网