TIDMJARA TIDMJARU TIDMJARE
RNS Number : 2072F
JPMorgan Global Core Real Assets Ld
18 March 2022
LONDON STOCK EXCHANGE ANNOUNCEMENT
JPMORGAN GLOBAL CORE REAL ASSETS LIMITED
QUARTERLY NET ASSET VALUE AND PORTFOLIO UPDATE
Legal Entity Identifier: 549300D8JHZTH6GI8F97
JPMorgan Global Core Real Assets Limited ("JARA" or "the
Company") announces an unaudited Net Asset Value ("NAV") as at 28th
February 2022 of 94.99 pence per share. During the quarter to 28th
February 2022 the Company paid a dividend of 1 penny per share on
25th February 2022, bringing the total return for the quarter to
+0.96%.
JARA's portfolio is continuing to perform well since the Company
has been near fully invested. Across both public and private
allocations, and measured in local currency, JARA's real estate,
infrastructure and transportation allocations returned 2.9%, 2.1%
and 2.1%, respectively, over the three month period . The 0.7%
depreciation of the US dollar versus sterling over the quarter*
offset some of this strong asset level return. We are again pleased
to see JARA's portfolio deliver positive returns over what has been
a very volatile period for most asset classes.
As per the announcement made on 4th March 2022, the portfolio
has no exposure to Russia or Ukraine at a net asset value or income
level. JARA's core approach to investing should, as it did during
the worst of the COVID related volatility, result in a relatively
stable asset level performance. The portfolio has large exposures
to logistics, long dated infrastructure cash flows and, via the
transport allocation, to backbone transport assets such as liquid
natural gas tankers, as well as some smaller allocations to
offshore renewable energy maintenance vessels; all areas of
interest given the current macro background.
JARA has now paid out 8 pence per share of dividends since IPO
and the current dividend yield is 4.7% as at the closing price on
16th March.
* The GBP/USD exchange rate was 1.34175 as at 28th February 2022 .
Dividends
The most recent quarterly dividend of 1 penny per share was paid
to investors on 25th February 2022 , representing an annualized
yield of 4.7%* . In the absence of unforeseen circumstances, the
Board expects the ongoing yield to be within the target range of 4
- 6% yield on issue price as set out in the Company's IPO
prospectus.
* Based on JARA's closing share price as at 16th March 2022.
Issued Share Capital
No new shares were issued over the quarter, As at 28th February
2022, there were 217,407,952 shares in issue. Since its IPO in Sept
2019 JARA has seen its share capital expand by 45.9%.
Portfolio Construction
As at 28th February 2022, the Company's portfolio was valued at
GBP204.7 million and was 99% invested. As announced on 4th March
2022, the Company made its initial commitment into US Real Estate
Mezzanine Debt. This investment will take JARA to being effectively
100% invested and was funded from its cash balance and by reducing
the liquid real asset allocation portion of JARA's portfolio.
This investment will provide JARA with exposure to a portfolio
of 15 existing loans, with a bias towards multifamily and office
loans. The weighted average duration of the portfolio of loans is
2.7 years. At full investment, and with the addition of the
Mezzanine Debt strategy, the Company will have increased its
sensitivity to rising interest rates, given the Mezzanine
strategy's 64% exposure to floating rate loans.
In 2021 commercial real estate markets were on a very positive
path. Investment sales volumes were strong, debt flows remained
high, and core real estate equity returns climbed to approximately
20% for the full year. Core real estate mezzanine debt benefits
from these strong underlying fundamentals and continues to offer an
attractive relative value to other fixed income investment products
seeking similar current income return.
Sector exposure Percentage of NAV
Total Exposure Private Asset Public Asset
Exposure Exposure
Real Estate Equity 47% 39% 8%
Real Estate Mezzanine 8% 4% 4%
Infrastructure 23% 17% 5%
Transportation 21% 18% 3%
----------------------- --------------- -------------- -------------
Total 100% 78% 21%
As at 28th February 2022 . Numbers may not sum due to
rounding.
Geographical exposure Percentage of NAV
31.8.21 30.11.21 28.02.22
North America 48% 49% 54%
Asia Pacific 29% 29% 29%
Europe 15% 16% 16%
UK 3% 1% 2%
Other 1% 1% 0%
Total 95% 96% 100%
Geographical exposures only include invested capital.
Private Asset Portfolio Metrics
The private assets have the most complete data set compared to
the listed portion of JARA's portfolio given their less consistent
and non standardised reporting; therefore below we have included
the aggregated detail from the private portion of JARA's portfolio
to allow further analysis and comparison on a time series basis.
Private asset exposure currently represents 78% of JARA's NAV.
Investments
-- 268 investments and, at a more granular individual asset
level, look through exposure to 1,023 individual assets (30th
November 2021: 957)
31.8.21 30.11.21 28.02.22
Investments 236 251 268
Assets 922 957 1,023
Private Portfolio Operating Metrics
Discount Rates
-- The blended average discount rate is 7.3%. Asset level
discount rate will vary by strategy, with real estate currently
having a blended rate of 6.1% and Infrastructure and Transport
being 8.6%. The discount rate will change to some degree as new
assets are acquired. The discount rates have remained relatively
stable over the last couple of quarters and changes are primarily
driven by portfolio acquisitions and disposals rather than a
changing of assumptions.
31.8.21 30.11.21 28.2.22
Portfolio discount
rate 7.5% 7.4% 7.3%
---------------------------- -------- --------- --------
Property 6.3% 6.2% 6.1%
Infrastructure & Transport 8.7% 8.8% 8.6%
Lease Duration
-- 4.4 years average lease duration in real estate and
transportation, with just 7% of JARA's portfolio leases due to
expire in 2022.
31.8.21 30.11.21 28.02.22
Weighted Lease
Duration (years) 4.7 4.7 4.4
Occupancy
-- 98% occupancy of leased assets in real estate and
transportation, of which 98% paid income as expected in Q4 2021, in
line with Q3 2021. At an overall portfolio level, occupancy and
income receipts are in line with what the manager expects as
optimal portfolio performance.
31.8.21 30.11.21 28.02.22
Occupancy 97% 98% 98%
Loan To Value
-- 39% portfolio weighted average loan to value across private
assets. Asset level LTVs will vary by strategy with the real estate
blended LTV of 31% and Infrastructure and Transport blended LTV of
48%. The underlying strategies generally take a conservative view
on overall leverage use and this approach has benefitted them over
the last year of COVID related volatility.
31.8.21 30.11.21 28.02.22
LTV 40% 39% 39%
Debt
-- 3.0% blended average cost of debt across the strategies, with
78% being fixed and 22% floating and a weighted average maturity of
5.7 years .
31.8.21 30.11.21 28.02.22
Debt Cost 3.2% 3.2% 3.0%
Fixed 82% 82% 78%
Floating 18% 19% 22%
Maturity (years) 5.6 5.9 5.7
Development Profile
-- The private asset portfolio had less than 3% exposure to
development assets. This allocation allows the Manager, where
appropriate, to capitalize on areas where construction is a more
effective way to gain access to assets due to the rich pricing in
markets. Currently the development allocation is mainly focused on
three areas; Logistics assets, US single family residential
(collectively representing $2.2bn of value) and Energy Logistic
transportation. Each underlying strategy has the capacity to engage
in a small degree of development and this demonstrates the strength
and flexibility of the JPM Alternatives Platform.
We would expect construction exposure across JARA's portfolio to
remain relatively low on an aggregate basis.
31.8.21 30.11.21 28.02.22
Development Risk <3% <3% <3%
Exposure
Currency
The main currency exposures of the portfolio (including
liquidity funds) are as follows:
Currency 31.8.21 30.11.21 28.02.22
USD 59% 60% 64%
EUR 10% 10% 9%
AUD 8% 8% 7%
JPY 6% 6% 6%
GBP 5% 5% 1%
RMB 3% 3% 3%
SGD 2% 2% 3%
CAD 2% 2% 2%
NZD 2% 2% 2%
As at 28th February 2022 - may not sum to 100% due to
rounding.
18th March 2022
Alison Vincent
JPMorgan Funds Limited - Company Secretary
Telephone 0207 742 4000
Notes
The Company aims to provide holders of the Ordinary Shares with
a stable income and constant currency capital appreciation through
exposure to a globally diversified portfolio of Core Real Assets in
accordance with the Company's investment policy. The Company is
seeking exposure to Core Real Assets through various real asset
strategies, namely: Global Infrastructure, Global Real Estate,
Global Transport and Global Liquid Real Assets. J.P. Morgan's
Alternative Solutions Group has the primary responsibility for
managing the Company's portfolio.
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