SKAGEN m 2 Statusrapport januar 2014

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1 SKAGEN m 2 Statusrapport januar 2014

2 Hovedtrekk SKAGEN m 2 januar 2015 SKAGEN m2 steg 8,0 prosent i januar, noe som var 0,3 prosentpoeng mindre enn referanseindeksen til fondet. SKAGEN m2 opplever mye tegninger i fondet og den totale forvaltningskapitalen har steget 50 prosent til nesten 1,3 milliarder kroner. I en slik periode er kontantbeholdningen i fondet litt høyere enn det som er vårt langsiktige mål. En litt høyere kontantbeholdning kan påvirke avkastningen litt negativt når markedet og amerikanske dollar stiger. Globale renter fortsetter å falle og investorene fokuserer derfor på kontantstrøm og utbytter, noe som trekker mange til den globale eiendomssektoren. De beste markedene i januar var India, Filippinene og Frankrike. Verdens største eiendomsmarked, nemlig USA, viste fortsatt styrke. Japan og Kina var de svakeste eiendomsmarkedene i perioden. Den beste investeringen var Ashford, som steg 43 prosent. Ashford Trust gjorde flere oppkjøp forrige måned, noe som øker inntektene til Ashford. Vi mer enn doblet posten fra 0,5 til 1,3 prosent før oppgangen. I løpet av måneden fikk aksjonærene i Keppel Land et kontantbud fra den største aksjonæren Keppel Corp. Budet hadde en premie på 31 prosent. Dic Asset sa opp sin administrerende direktør og markedet reagerte positivt. China South City var den svakeste investeringen i januar etter at selskapet annonserte svakere enn forventede salgstall for 3Q15. Kinesiske eiendomsutviklere er under press som følge av rykter om økende anti korrupsjonstiltak fra regjeringen innen sektoren. Dette førte til at investorer har blitt mer forsiktige. Våre brasilianske selskaper fortsatte å gjøre det svakt. General Shopping var ned 19 prosent. Selskapet er nå 0,3 prosent av porteføljen. Hovnanian i USA var også svak etter at de største boligbyggerne Lennart og Dr. Horton kom med svak guiding for sektoren. De 10 største postene utgjør nå 33,2 prosent av porteføljen. Fondet har 55 poster og 6 prosent i kontanter. 2

3 Avkastning, januar 2015 A Januar Hittil i kv. Hittil i år Siden start* SKAGEN m2 A 8,0% 8,0% 8,0% 21,8% MSCI ACWI Real Estate 8,3% 8,3% 8,3% 28,1% Relativ avkastning -0,3% -0,3% -0,3% -6,3% 3 Note: Alle tall ut over 12 måneder er annualisert (geometrisk avkastning) * Startdato: 31 oktober 2012

4 Markedsutvikling i januar 2015 i NOK (%) India Tyrkia Philippinene Frankrike Hong Kong Sør-Afrika USA Thailand Indonesia MSCI Eiendomsindeks UK Tyskland SKAGEN M2 Australia Singapore Vekstmarksindeksen Norge Canada Verdensindeksen Kina (lokal) Kina (Hong Kong) Japan Brasil

5 Største bidragsytere, januar 2015 Største positive bidragsytere Største negative bidragsytere Selskap NOK (000) Olav Thon Ashford General Growth Properties Dic Asset Brandywine Realty Trust HCP Deutsche Wohnen Apartment Investment & Man Keppel Land Selskap NOK (000) China South City Holdings BR Properties BR Malls Participacoes Mitsui Fudosan -914 Hovnanian Enterprices -895 General Shopping Brasil -881 Columbia Property Trust -324 Shimao Property Holdings -307 Parque Arauco -144 Mercialys Total verdiskapning i januar 2015: NOK 73,2 millioner Note: Bidrag til absolutt avkastning 5

6 Største bidragsytere, januar 2015 Største positive bidragsytere Selskap NOK (000) Olav Thon Ashford General Growth Properties Dic Asset Brandywine Realty Trust HCP Deutsche Wohnen Apartment Investment & Man Keppel Land Mercialys Et av de billigste selskapene, og som nå opplever omvurdering Økte aktivabasen etter Ashford Trust sine oppkjøp. Selskapet er management-selskapet til Ashford Trust og Prime, og ble spunnet ut av Ashford Trust. Sterk drift i 4Q. Mye gjeld og vil dra nytte av lavere renter. Administrerende direktør gikk av etter svak utvikling de seneste årene. Selskapsstyringen er forventet å bli bedre. Ingen selskapsspesifikke nyheter. Fallende renter dro opp REITS i helsesektoren i januar. Positive refinansieringsnyheter selskapet hentet USD 600m i 10 år med en rente på 3,4 prosent Ingen selskapsspesifikke nyheter. Ingen selskapsspesifikke nyheter. Hovedaksjonær bød på selskapet for å ta det av børs. Mercialys annonserte sterke driftstall for måneden. Note: Bidrag til absolutt avkastning 6

7 Største bidragsytere, januar 2015 Største negative bidragsytere Selskap NOK (000) China South City Holdings BR Properties BR Malls Participacoes Mitsui Fudosan -914 Hovnanian Enterprices -895 General Shopping Brasil -881 Columbia Property Trust -324 Shimao Property Holdings -307 Parque Arauco -144 Svake salgstall for 3Q14 på grunn av utsettelser fra lokale myndigheter. Generell motvind for kinesisk eiendom. Shenzhen-utviklere, utsatt for korrupsjonsrykter, svekket hele sektoren i Kina. Selskapet påvirket av svak brasiliansk økonomi. Selskapet påvirket av svak brasiliansk økonomi. Ingen selskapsspesifikke nyheter Ingen selskapsspesifikke nyheter Selskapet negativt påvirket av gjeld i USD. Selskapet har eiendommer kjøpt til for høye priser. Generell motvind for kinesisk eiendom. Shenzhen-utviklere, utsatt for korrupsjonsrykter, svekket hele sektoren i kina. Ingen selskapsspesifikke nyheter Note: Bidrag til absolutt avkastning 7

8 Viktigste endringer hittil i 2015 Q1 Ashford Trust ++ Lexington Realty Trust -- Mitsui Fudosan ++ Colombia Property Trust ++ CBL Properties ++ HCP ++ Melia Hotels ++ Global Logistic ++ Apartment Investment ++ Q2 + Økte posisjoner -- Reduserte posisjoner 8

9 Største kjøp og salg i januar 2015 Kjøp Salg Ashford Trust Hentet kapital og kjøpte to hoteller. Samtidig kjøpte de ut joint venture partner Prudential. Vi økte posten litt fra 3 prosent til 3,5 prosent. Lexington Redusert på grunn av forretningsmodell og dårlig driftsmessig utvikling over lang tid. 9

10 Største poster i SKAGEN m 2 pr. 31. januar 2015 Posisjonens størrelse Pris P/NAV last Div. Yield 2015e EBITDA 2015e/EV General Growth Properties Inc 3,9% 30,69 110% 2.2% 5.0% Ashford Hospitality Trust 3,8% 10,52 90% 4.6% 7.8% Brandywine Realty Trust 3,7% 16,76 105% 3,6% 6,9% Columbia Property Trust 3,5% 24,24 80% 5.0% 6.4% HCP 3,5% 47,52 135% 4.8% 5.7% Global Logistic Properties 3,4% 2,53 101% 3.6% 4.6% Apartment Investment & Man 3,1% 40,28 105% 2,8% 5,2% Mitsui Fudosan 2,8% % 0.7% 5.5% SL Green Realty 2,8% 128,14 100% 1.9% 4,3% PS Business Parks 2,8% 85,47 105% 2,3% 5,8% Vektet topp % 103% 3.2% 5.8% Vektet topp % 3.2% 6.3% Referanseindeks 3.1% (actual) 10

11 Geografisk fordeling versus referanseindeksen (%) 54 Fond Indeks Asia ex Japan EMEA Frontier Markets Japan Kjerne EU Nord Amerika Norden Perifer EU Oceania Sør Amerika Kontanter 11

12 Nyheter og annet om porteføljeselskaper på engelsk

13 Key earnings releases and corporate news January MERY FP, Mercialys (2.1%) Solid set of sales numbers and rental growth Summary: Mercialys announced sales numbers for FY14. Rental revenues were EUR 152.8m. L-F-L rents were up +3.1%, with a +2.8% increase above inflation, higher than the revised guidance of +2.5%. At the end of 2014, Mercialys acquired eight large food stores for EUR 278m with redevelopment potential. Development pipeline now represents ~ EUR 210 m (estimated to provide EUR 14m of rents by 2017). In addition company sold various mature or non-strategic assets for EUR 81m at end Further numbers to be released in full set of FY14 numbers. Implications for the investment case: Solid sales numbers for Mercialys. Specialty leasing was 1.2% of the 3.1% L-F-L growth, confirming the strategy of entering this segment, and also the active approach of the management. Pipeline looks promising but has to be extended over time. Even though there is solid rental growth during 2014, we are cautious of what impact a declining French economy has on consumption. This has been a factor for trimming the position from 3% to 2.3% during the year. Mercialys management has been very skilled in their replenishment process and has continuously enhanced quality and effectiveness on operations and assets. Mall positioning is another reason for downsizing; a question mark remains over small/mid-sized malls in a polarising environment where big is beautiful and convenience stores are growing. However Mercialys has a unique advantage as it is backed up by Casino in asset pipeline and collaboration in e-commerce/platform/discount structures, etc. Valuation and solid balance sheet, in combination with decent rental growth still supports the position. Oberoi, India (1.0%) Good Q315- Sharp pick-up in pre-sales Summary: 3Q sales were up 27% YoY. Volume (#sqm) sold was up 422% YoY (from low level) and value increased 400%. EBITDA was up 41% YoY on higher margins (58%) primarily on better revenue mix on near completed Exquisite project sales and steady revenue from rental assets. Oberoi management highlighted that the Mulund premium residential project witnessed robust sales (300 apts) within 5-days of launch in mid-jan 15. Earnings grew 16% YoY. Oberoi s net debt was RS 7.3bn, increased mainly due to Borivali land acquisition and ongoing capex in Oasis-Worli, however balance sheet is still solid at ND/EQ of 15%. Implications for the investment case: Oberoi is one of the best positioned to benefit from the revival in the Mumbai residential market given its strong high value pipeline (Mulund/Oasis-Worli (branded as Ritz residence)/borivali). Market has already seen signs of absorption pick-up and given this and new projects that will hit the market, we believe Oberoi can deliver significant increase in cash flow visibility and earnings over the next 1-2 years. Macro sentiment works in favour with more expected rate cuts ahead. Positive also is office space leasing showing signs of recovery. Oberoi recently closed its first lease transaction (7k sqm) for its near completion office building Commerz II. Leasing assets accounts for 10% of NAV but this is increasing. Further launches and higher lease ratio in new office projects are triggers while launch delays (mostly due to regulatory issues) are the major operating risk together with too fast expansion (hotels, etc.) increasing debt levels to unhealthy levels. Management indicated that there are actively considering new land acquisitions as there is high visibility of Borivali launch. 13 1

14 Key earnings releases and corporate news January (cont.) Unibail Rodamco, France (1.4%) AIT, Singapore (0.8%) 14 Solid FY14 result, lower EPS guidance Summary: UR reported solid FY14 result with key indicators (FFO, Dividend, NAV) slightly over consensus. The LFL Net Rental Income (NRI) growth was up 3.8% YoY, 300 bps above indexation/inflation. This was driven by Central Europe (+6.7%), France (+4.2%) and Spain (+4.1%). UR signed 1,458 leases on standing assets, with a minimum guaranteed rental uplift of strong 19.6%. Vacancy stood at 2.2%, of which 0.3% in strategic vacancy to prepare for major restructuring projects, down from 2.5% at the end of In the Retail segment, footfall increased by 1.5% and tenant sales in the Group's shopping centres for the year 2014 grew by 2.7%. In the French offices segment, UR recorded a second year of outperformance with a total take-up of 93,217 m², up by 16% YoY, compared to the growth in take-up in Greater Paris of 13%. LFL NRI growth of UR`s French offices division came to 5.2%. UR`s net recurring result was up 8.3% YoY, driven by strong LFL growth in shopping centres and offices. Pipeline stands at EUR 8bn. Cost of debt is at a low 2.6% and LTV at 37%. NAV stands at EUR (+4.2% YoY). UL will propose a dividend of EUR 9.60/share (4% yield) for 2014 (increase of 7.9% YoY) representing an 88% pay-out ratio. Implications for the investment case: Overall positive report. However the previously communicated 5 year business plan (FY14-18) of 5% to 7% growth in recurring EPS was adjusted downwards to effectively -5% to -7% in recurring EPS for FY15. This was followed by new growth guidance in recurring EPS of 6% to 8% for the period FY The reason given by the company is that it realised a higher than anticipated volume of disposals in FY14 (EUR 2.4bn) and expects further disposals for FY15 (meaning less income generating assets). The new outlook effectively implies +3% to +5% CAGR in recurring EPS over the whole FY14-Y18 period, therefore a decline versus the previous outlook. A lower than expected inflation impact, lower LFL growth on offices and cancellation of projects thereby also played a role according to the company. Furthermore UR also acquired ~EUR 1bn, which is apparently not enough to offset lost income from sales. On the positive side, management guided that the dividend will be at least flat next year at EUR 9.6. Company is now trading at a high premium to NAV but attracts investor interest due to the growth story and the decent dividend yield. Even though m² likes the strategy and operational skill of UR, we have over the last months taken down the position ~60bps reflecting the valuation. Solid 3Q FY14/15 numbers, no excitement Summary: Total property income increased by 6% YoY (INR). Clean net property income increased by 5% YoY (INR). Income to be distributed increased 6% YoY (SGD). The numbers were backed by the new building in Bangalore (Aviator) and positive rental revisions in Chennai. The Portfolio`s committed occupancy remained healthy at 96%. AIT announced a plan to develop a new IT building and multi-level car park at the V in Hyderabad. In addition AIT is creating another development pipeline with its acquisition of BlueRidge Phase II in Pune (first entry into Pune). Balance sheet continues to be strong with a gearing of 23%, which gives AIT debt headroom of SGD 304m before reaching 40% limit. Implications for the investment case: AIT delivered decent numbers despite the fact that India s commercial market still suffers from weak demand due to poor economic development in recent years. On the negative side, the retention rate declined from 93% to 80% over a year; however occupancy is still high and rental revisions are positive. Growth plans are on track and the entry to Pune is positive as a diversification of assets. Stock has performed well over last 12 months (+34%) given the poor commercial market conditions in India, something that we think will change as economic reforms are implemented and gain traction. New REIT legislation will likely make the case more visible. Currency is still the main risk (INR/SGD). AIT is starting to get expensive. 1

15 Key earnings releases and corporate news January (cont.) Mapletree, Singapore (1.7%) Etalon, Russia (0.5%) First REIT, Singapore (1.4%) 15 3Q15 results in line with expectations Summary: Revenue came in at +6% YoY, driven by 6 acquisitions (China, Korea and Singapore) made over the year. Portfolio rent reversions were positive at 9% in 3Q15. Conversion from single to multitenant use drove up operating costs which led to lower NPI growth of 3% YoY. MLT reported distribution income at 2% increase YoY. Occupancy rate declined (0.3%) to 96.9%, however of the leasing expiring FY15, 78% have been pre-committed/renewed which should mean low risk of further vacancy. Balance sheet remains in good shape with gearing at 35% (3.1 yrs avg. debt duration). More than 90% of MLT s income in current FY has been hedged or derived in SGD, mitigating FX risks. Implications for the investment case: Report in line with expectations without surprises. MLT has several more assets with single tenants with lease expiration over next few years. To mitigate the earnings disruptions caused by single to multiuser conversions, MLT has to speed up the pace of overseas acquisitions. Company announced that a sponsor has added five assets in Malaysia and China totalling 670k sqm which is positive. MLT has good debt headroom to acquire these assets. MLT offers a good geographic diversification and defensive logistics long lease exposure. Organic demand for logistics space is generally healthy across overseas markets where MLT operates, although Singapore is currently facing a challenging leasing environment. Triggers are further acquisitions or redeveloping older assets. Risk is hiked interest rates in Singapore that will hurt DPU. 4Q14 Operating highlights Summary: Etalon`s new contact sales surged 34% YoY in volume and 41% in value for 4Q14. The blended average price per sqm increased 6% YoY to RUB 90.5k. Cash collection increased +36% YoY. Etalon`s management estimates the net debt at only RUB 635m due to the strong cash collection, less construction capex and land bank investments than guided a year ago. Mortgage market dropped in December to 23% from 28% in 3Q. In addition to strong cash collection at year-end, company had 432k sqm of various RE completed available for sale. This should mean that Etalon should require less capex to finance construction in Implications for the investment case: No full set of figures reported, only operational highlights, however sales numbers were better than expected. Etalon performed better than its competitor, LSR, as it had more available RE (more launches) for sale in the strong December sales. Balance sheet still very strong and company can benefit from market share growth during 2015, a year that is expected to be challenging with declining mortgage market and overall economy. Trading at P/E15: 3.2x - EV/EBITDA: 2.2x - P/B:0.6x - DY15E:4.6% Stable FY14 numbers Summary: FIRT reported revenue increase YoY of 12% reflecting acquisitions made last 18 months. NPI came in at a 14.5% YoY increase on lower expenses in South Korea asset. FY14 distribution income came in at S$ 93.3m with a DPU of 8.05 Scts, representing a 7% YoY increase. NAV increased on revaluation gains by 5.3% to S$ 1.02/shr. Gearing stands at 33% (maximum is 35%). Implications for the investment case: This is a stable and defensive stock that own hospitals in Asia (mainly Indonesia) and captures the trend of hospital shortages. FIRT has a master lease structure that provides a stable income stream (earliest expiration in Indonesia 2027 and in Singapore 2017). Rents from Indonesia are in SGD which mitigates FX fluctuations. Annual rent escalations are normally capped at 2% annually. Sponsor has 29 hospitals in pipeline which FIRT has a first-right of refusal to acquire, historically at yields between 9-10% which is accretive for unitholders. A drag for m2 is the unfavourable Norwegian taxation. 1

16 Key earnings releases and corporate news January (cont.) IRSA, Argentina (1.0%). Colombia Property Trust, US (3.1%). IRSA Creates Pure Commercial Real Estate Vehicle in Argentina. Summary: IRSA announced that it transferred 83,789 sqm of its current office portfolio and a land reserve of 6,135 sqm to its 95.73% controlled subsidiary, Alto Palermo SA (APSA AR) for US$308 million. APSA operates IRSA s shopping mall business. At the same time, the company launched the new brand IRSA Commercial Properties to consolidate all its rental businesses, including 14 shopping malls in Argentina with a gross leasable area (GLA) of 325,000 sqm and 95,031 sqm in six premium offices. Implications for the investment case: The launch of the IRSA Commercial Properties brand simplifies the group s organisational structure. The creation of a pure Argentine rental vehicle may unlock the value of this business and attract more investor interest. IRSA owns a lot of mixed segments, including real estate (malls, offices, hotels, land reserves, etc.) and financial services (a mortgage bank) in Argentina, as well as real estate and opportunistic investments in the US and Israel. We like this move. Acquisitions in Manhattan and Boston for $588m. Summary: Columbia Property Trust has expanded its holdings in Manhattan and entered Boston s urban core through two acquisitions totalling $588 million. These acquisitions are expected to increase the company s leverage to approximately 37% of gross real estate assets. Implications for the investment case: These acquisitions bring the portfolio to approximately 59% CBD, based on annualised lease revenue. The company is improving the overall quality of its portfolio, but the price is high. NOI of $22.5m for $588m means less than 4 % NOI yield. However, each property offers upside potential, with in-place rents below market price and significant lease rollover in the next two to five years. We like that they are increasing their leverage somewhat and most likely, the FFO yield increases to 9 %. The market may fear that they will issue equity. This risk is small at these levels. Olav Thon, Norway (2.3%). Like-for-like sales increase 3.8%. Summary: Olav Thon issued sales numbers. Total sales increased 4.6% and like-for-like sales were up 3.8%. Implications for the investment case: Olav Thon is one of the cheapest real estate companies in Europe. The company has continued its healthy growth without issuing equity for the last 30 years. Norwegian consumers may become more cautious going forward, but with the interest environment having never been more favourable, we will keep the holding for the long term. 16 1

17 Key earnings releases and corporate news January (cont.) Dic Asset, Germany (2.0%). Numbers in line or slightly below expectations. CEO to leave after Summary: Dic Asset released it first key performance numbers in line or slightly below expectations. The market fears worse number after some weakness in 3Q. The most important news was that the CEO will leave after The management s success at bringing down the NAV may end. Implications for the investment case: Dic Asset is a turnaround case that has seen some improvement lately. The conflict of interests between current management and the main owner may end when CEO leaves. Hopefully, this will put the company in a position to take care of its own interests and work for all shareholders instead of just dealing with the main owner. Keppel Land, Singapore (1.0%). Keppel Corp, main shareholder in Keppel Land, made a bid for the whole company. Summary: The bid was 30% above last closing price the day before. Implications for the investment case: Our position is 0.9 % of the fund, meaning a 27 basis point gain at fund level. Ashford Trust, US (3.6%). Created a new company, bought two hotels lately and issued equity. Summary: Ashford Trust has been quite active lately. It bought the remaining part of its JV from Prudential for $250m, bought 2 hotels for a total of $80m and created a new subsidiary, Ashford Select, that will focus on the mid segment in the hotel industry. The new company is quite small with assets of $330m and debt of $230m. It is expected that they will spin off this company, but it is far off critical size and the issued money may be used to grow this platform. Implications for the investment case: Short-term pain from issuing equity, but long-term, it is a good decision for shareholders. The company operates with non-recourse debt and usually keeps their cash balance quite healthy. The expected spin-off will most likely not take place this year. An important side effect is that they increased the management fee to their management company, Ashford, which we also own (1% of the fund). 17 1

18 Key earnings releases and corporate news January (cont.) British Land (2.5%). Gave 3Q letting update (2014 ends 3/2015) with no significant news. Summary: British Land gave an update on 3Q letting activity. The company increased its occupancy 180 bp to 96.7%. The like-forlike rental increased 10.9%. The company also sold a net 280m. Implications for the investment case: The company provided an update as expected and no significant news. The company continues to deleverage in a booming market and LTV is significantly lower than stated goals (40-50%). The danger of this strategy may be a loss related to timing and they may come to a point where they realize that their leverage is too low. Hopefully, their timing strategy is good and even if they are wrong and the market continues upwards, the company still has good exposure to real estate markets. SL Green, US (2.8%). General Growth Properties, US (3.7%). 4Q in line with strong expectations. Summary: SL Green, Manhattan office exposure, provided results in line with expectations. They increased their occupancy in both Manhattan and the suburban area. Suburban area increased from 82.4 to 83.3%. The suburban area is still weak with average rentfree months increasing from 5.4 to 8.9 months, and may explain the modest market-to-market increase in rents by 2%, which may not actually be an increase but rather a decrease taking into account free rents. The same store replacing rents in Manhattan was strong, increasing 13% YoY. Their debt portfolio decreased from 1.46b to 1.4bp and yield declined modestly from 10.5 to 10.4%. Implications for the investment case: The company met expectations, but there were no surprises. They increased their dividend to 60c/q. The company is an opportunistic player in Manhattan and creates long-term value. We like the holding and will keep it as long as it does not become too expensive. 4Q strong results and strong growth guidance. Summary: General Growth Properties, a US mall owner, provided strong results as expected. The company expects to continue its strong growth in FFO for the next two years by 8 and 16%, respectively. Occupancy increased to 96.7% (full malls), up 160bp QoQ. Same store releasing spread was 18.3% which was extremely strong. The company continues to see a lot of demand for space. Implications for the investment case: The company has changed from fearing e-commerce threat to focusing on its function as a logistic hub for retailers. The demand for space has been strong, and the company has been able to increase rents substantially. The company is trading close to 20xFFFO16e and is not cheap. The management has however met expectations continuously and we keep the holding due to operational performance. 18 1

19 The largest companies in SKAGEN m2 as of January 15 General Growth Properties (GGP), founded in 1954, is a real estate investment trust (REIT) that owns, leases, manages and develops shopping centres. The company is the second largest mall operator in the world. The company holds interests in 120 malls, 7 office properties and 6 other properties generating an average of USD 564 in tenant sales per square foot (malls). Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing opportunistically in the hospitality industry across all segments and at all levels of the capital structure primarily within the United States. Invests opportunistically in the whole capital structure including lending to other hotel owners. Ashford Hospitality Trust owns 115 hotels (directly and in JV with Prudential). Brandywine Realty Trust is a self-administered, self-managed and fully integrated real estate investment trust. The company is engaged in the ownership, management, leasing, acquisition, and development of suburban office properties primarily. It also owns an interest in and operates a commercial real estate management services company. 209 buildings with a total of 24.1m sqf (2.1m m 2 ). 182 office, 19 industrial and 5 mixed use properties in addition to 4 redevelopment properties. It is also part of 19 unconsolidated JVs. Columbia Property Trust, Inc. focuses on the acquisition, development, ownership, leasing, and operation of office properties. Owns 59 office buildings, total 16.5m sqf (1.6m m 2 ) valued at USD 5.1bn. The company was listed without any equity issue in Oct.13 to provide liquidity to shareholders. Bought back shares during 4Q after listing. Core focus is 16 main cities throughout US. 50% CBD and 50 suburban exposure. Occupancy 92% Financial, 91%. From externally managed to internal management. HCP is a fully integrated self-administered real estate investment trust that acquires, manages, and invests in healthcare real estate located in the US and Mexico. HCP is well diversified across healthcare property types: senior housing (35% of NOI), skilled-nursing facilities (31%), medical office (13%), life science/labs (15%), and hospitals (6%). HCP has USD 22bn in AUM and a well-balanced portfolio of 1163 properties. Company has generated ~16% compounded annual returns since IPO 1985, and has 29 years of consecutive dividend growth. 19 1

20 The largest companies in SKAGEN m2 as of January 15 (cont.) GLP is Asia's largest provider of modern logistics facilities. The company owns, manages and leases over 600 completed properties spread across more than 60 cities in China, Japan & Brazil forming an efficient network with assets strategically located in key hubs, industrial zones and urban distribution centres. The USD 17bn property portfolio consists of 23m m 2 serving more than 700 customers. The Japan portfolio is mostly complete and stabilised providing strong operating cash flow to fund the group's growing business in China. The company also set up a China fund at the end of 2013 to enable recycling in the Chinese market in line with the Japanese model. This business model leads to a more effective capital structure, recurring income and capital recycling (listing of J-REIT & CLF fund). Apartment Investment & Management is a US REIT focused on multi-family rental buildings, with some 66,000 apartments in the top 20 markets. The number of apartments has been dramatically reduced since 2004 from over 160,000 (net owned) in 100 markets to today s number, of which 56 are so called Conventional and 10 Affordable. Sold off a lot apartments in and used USD 1bn on share buybacks. The company bought back 24% of outstanding shares from 2Q06 until Oct. 08, but had to issue equity at a lower price in Current strategy was implemented in 2005 and is to sell 2 apartments to buy 1 with better location and higher quality. Established in 1941, Mitsui Fudosan has been an active leader in the Japanese RE industry, successfully developing new business opportunities and establishing a dominant position. The company is an integrated RE firm involved in office leasing, commercial facilities, condominium development, investment property development and REITS. 8% of MF s assets are located on other continents. Strong balance sheet after capitalisation (first in 23 years) in summer Well integrated and balanced growth model with development and investment properties diversified among different RE sub segments. Management business (car park leasing, property management) provides stable earnings growth over time, in addition to other recurring earnings from commercial assets, to balance the volatility in the development segment. SL Green Realty Corp. is a fully integrated, self-administered and self-managed REIT. The company is focused on owning and operating office buildings in Manhattan. It owns equity or debt in 92 properties totaling 41.6 m SF, of which it owns equity (~82 %) in 29m SF and the rest is collateral for debt investments. SL Green provides debt financing, in many cases to achieve properties. In addition to Manhattan, they also have interests in the suburban areas of Manhattan. (5.3 m SF) Manhattan occupancy of 95.3% compared to 82.4% (3Q14) in suburban areas.. PS Business Parks, Inc. is a self-advised and self-managed real estate investment trust that acquires, develops, owns 29 m sqf (2.7 m2) and operates commercial properties, primarily multi-tenant office industrial or "flex" space in 102 business parks in 8 states. The companies main exposure are towards California. Flex (52%), industrial (30%) and office (18%). Total occupancy is 90%. 20 2

21 Additional information

22 Why invest in listed property and SKAGEN m 2? Q. Why invest in listed property? Listed global real estate securities provide exposure to property but with the benefits of liquidity. Listed global real estate securities offer the ability to invest in property around the world, with the flexibility to gain exposure to opportunities that would otherwise be difficult to access. Listed global real estate securities enhance diversification Q. Why effects SKAGEN in your mportfolio. 2? The fund offers a great opportunity to access global listed real estate and use SKAGEN s unique investment philosophy to find investments within that are unpopular, undervalued and under researched. 22 2

23 Brief information on SKAGEN m² A class Broad mandate: Daily traded mutual equity fund, investing globally in listed real estate securities, including REITs, REOCs (Real Estate Operating Companies) and developers. m 2 Recommended investment horizon: Minimum 5 years. Dividends: No dividend payout; fund proceeds are reinvested at the fund level. Benchmark: MSCI ACWI Real Estate Net Return IMI. Fee model: Fixed annual fee 1.5 %*, no entry or exit fees. Minimum first subscription: EUR 150. Launch date: 31 October *Better/worse performance in terms of unit NAV growth relative to benchmark growth is split 90/10 between unit holders and the management company. Maximum annual fee is 3% and minimum fee is 0.75%. 23 2

24 Ønsker du mer informasjon? Se vår siste markedsrapport Informasjon om SKAGEN m 2 på våre hjemmesider Historisk avkastning er ingen garanti for framtidig avkastning. Framtidig avkastning vil blant annet avhenge av markedsutviklingen, forvalters dyktighet, fondets risiko, samt kostnader ved tegning og forvaltning. Avkastningen kan bli negativ som følge av kurstap. SKAGEN søker etter beste evne å sikre at all informasjon gitt i denne rapporten er korrekt, men tar forbehold for eventuelle feil og utelatelser. Uttalelsene i rapporten reflekterer porteføljeforvalternes syn på gitt tidspunkt, og dette synet kan bli endret uten varsel. Rapporten skal ikke forstås som et tilbud eller en anbefaling om kjøp eller salg av finansielle instrumenter. SKAGEN påtar seg intet ansvar for direkte eller indirekte tap eller utgifter som skyldes bruk eller forståelse av rapporten. Ansatte i SKAGEN AS kan være eiere av verdipapirer utstedt av selskaper som er omtalt enten i denne rapporten eller inngår i fondets portefølje.