TIDMJARA TIDMJARU TIDMJARE

RNS Number : 3374M

JPMorgan Global Core Real Assets Ld

21 September 2021

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") per share as at 31st August 2021 of 91.48 pence. During the quarter to 31st August 2021 the Company paid a dividend of 1 penny per share on 27th August 2021 , bringing the total return for the quarter to +5.1%.

Across both public and private allocations, and measured in local currency, JARA's real estate, infrastructure and transportation allocations returned 3.6%, 1.3% and 1.9%, respectively, over the three month period . This local currency return is in line with JARA's long term return targets. The 3.4% appreciation of the US dollar versus sterling over the quarter* benefitted overall return performance.

The gradual global reopening continues to benefit real estate sectors in both the public and private markets, including those which have struggled most as a result of the pandemic, along with a continuation of the robust usage of the logistics and industrial sectors. As a result, real estate was the largest driver of returns for Company over the period.

The transportation market is also benefiting from the increase in economic activity with measures such as port call data and utilisation levels looking strong. As a core investor in the asset class the Company is focused on access to this market through longer term contracts, which are less impacted by spot rates, but the portfolio does take advantage of attractive economics when renewing lease rates or acquiring new vessels. This addition of new vessels at higher rates serves to benefit the overall portfolio incrementally. The Company's listed allocation supplemented its private exposure by providing strong positive performance over the period.

   *   The GBP/USD exchange rate was 1.37625 as at 31st August 2021. 

Dividends

The most recent quarterly dividend of 1 penny per share was paid to investors on 2 7th August 2021, representing an annualized yield of 4.3%*. 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 31st August 2021. 

Issued share capital

8,600,000 new shares were issued over the quarter, seeing a 4% increase in the issued share capital of the Company. As at 31st August 2021, 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 31st August 2021, the Company's portfolio was valued at GBP197.6 million. During the period a further $13.9 million of committed capital was called by the Asia-Pacific Real Estate Strategy; this capital call increased the Company's invested position to 95% by the period end.

Over the period there was a commitment to JPM's US Real Estate Mezzanine Debt Strategy, which aims to capture the attractive returns currently available in that sector and will serve to boost contracted income. As at 31 st August 2021, the Company had uncalled commitments of $20.9 million.

Sector exposure Percentage of NAV

 
                          Total Exposure   Private Asset   Public Asset 
                                              Exposure       Exposure 
 Real Estate Equity            51%              37%            14% 
 Real Estate Mezzanine          0%              0%              0% 
 Infrastructure                22%              17%             6% 
 Transportation                22%              18%             3% 
-----------------------  ---------------  --------------  ------------- 
 Total                         95%              72%            23% 
 

As at 31st August 2021. Numbers may not sum due to rounding.

Geographical exposure Percentage of NAV

 
                  29.2.21   31.5.21   31.8.21 
 North America      48%       49%       48% 
 Asia Pacific       23%       29%       29% 
 Europe             15%       15%       15% 
 UK                 3%        3%        3% 
 Other              1%       1%       1% 
 Total              89%       96%       95% 
 

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 72% of JARA's NAV.

Investments

-- 236 investments and at a more granular individual asset level, look through exposure to 922 individual assets (31st May 2021: 880)

 
                29.2.21   31.5.21   31.8.21 
 Investments      235       232       236 
 Assets           831       880       922 
 

Private Portfolio Operating Metrics

Discount Rates

-- The blended average discount rate is 7.5%. Asset level discount rate will vary by strategy with real estate currently having a blended rate of 6.3% and Infrastructure and Transport being 8.7%. The discount rate will change to some degree as new assets are acquired. The discount rates have remained stable over the last couple of quarters.

 
                       29.2.21   31.5.21   31.8.21 
 Portfolio discount 
  rate                  7.5%      7.6%      7.5% 
 

Lease Duration

-- 4.7 years average lease duration in real estate and transportation, with just 7% of JARA's portfolio leases due to expire in 2021.

 
                      29.2.21   31.5.21   31.8.21 
 Weighted Lease 
  Duration (years)      4.9       4.9       4.7 
 

Occupancy

-- 97% occupancy of leased assets in real estate and transportation, of which 98% paid income as expected in Q2 of 2021, in line with optimal portfolio performance and a marginal improvement on Q1 2021. This was largely driven by improving Retail collections. At an overall portfolio level, occupancy and income receipts are in line with what the manager expects as optimal portfolio performance.

 
              29.2.21   31.5.21   31.8.21 
 Occupancy      97%       97%       97% 
 

Loan To Value

-- 40% portfolio weighted average loan to value. Asset level LTVs will vary by strategy with the real estate blended LTV of 30% and Infrastructure and Transport blended LTV of 51%. 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

 
        29.2.21   31.5.21   31.8.21 
 LTV      42%       40%       40% 
 

Debt

-- 3.2% blended average cost of debt across the strategies, with 82% being fixed and 18% floating and a weighted average maturity of 5.6 years .

 
                     29.2.21   31.5.21   31.8.21 
 Debt Cost            2.4%      3.1%      3.2% 
 Fixed                 83%       81%       82% 
 Floating              17%       19%       18% 
 Maturity (years)      5.2       5.9       5.6 
 

Development Profile

-- The private asset portfolio had less than 3% exposure to development assets, within the property and shipping strategies. 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 areas such as US and Asia logistics assets and US single family residential. 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.

 
                    29.2.21   31.5.21   31.8.21 
 Development Risk     <3%       <3%       <3% 
  Exposure 
 

Currency

The main currency exposures of the portfolio (including liquidity funds) are as follows:

 
 Currency      29.2.21   31.5.21   31.8.21 
 USD             66%       61%       59% 
 EUR             12%      11.%       10% 
 AUD             6%        8%        8% 
 JPY             6%        7%        6% 
 RMB             3%        4%        3% 
 GBP             2%        3%        5% 
 SGD             1%        2%        2% 
 CAD             2%        2%        2% 
 NZD             1%        2%        2% 
 

As at 31st August 2021 - may not sum to 100% due to rounding.

21st September 2021

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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September 21, 2021 02:00 ET (06:00 GMT)

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