Daragh Clarke Senior Real Estate Fund Manager 1 State Street Global Advisors Real Estate October 2014 Daragh Clarke Senior Real Estate Fund Manager This material is solely for the private use of New Ireland and is not intended for public dissemination. The information contained in this document is current as of the date presented unless otherwise noted. 2 IREPRS-0897 The Case for Real Estate The fundamentals of Real Estate investment: • Diversification • Can offer an Efficient Hedge Against Inflation • Historically Strong Income Returns* • An Investment Backed by Real Assets Source: SSgA Ireland, as at 30 September 2014, Diversification does not ensure a profit or guarantee against loss. * See slide 3 IREPRS-0808 3 Irish Investment Market Performance December 2003 – June 2014 Source: SSgA Ireland, Bloomberg/IPD, Past performance is not a guarantee of future results. IREPRS-0897 4 Irish Investment Property Market Source: SSgA Ireland, Bloomberg/Irish Property Databank, Past performance is not a guarantee of future results. * Capital Value. ** Total Return Value (i.e., assuming income reinvested) as represented by IPD Index. IREPRS-0897 5 What’s Changed since 2007? Sep 2007 Jun 2014 15 Year Avg. A Irish Property Equivalent Yield 4.0% 7.3% 6.6% B Yield on BofA Merrill Lynch 5+ Year Euro Government Index 4.5% 1.9% 4.2% C Yield Spread i.e., C = (A – B) -0.5% 5.4% 2.4% Source: SSgA Ireland,. IPD and Bloomberg, as at 30 June 2014. Past performance is not a guarantee of future results. IREPRS-0897 6 Irish Market Overview Investment Market: • Investment Turnover of €2.9bn in first 9 months of 2014 compared with €1.9bn in full year of 2013 • Strong interest from both international investors and domestic institutions/REITS continues • Yields in all primes sectors of the market are trending down Occupational Markets: • A diminishing supply of Grade A office stock in prime Dublin 2/4 locations is driving office rental values • Prime headline rents for Dublin offices now stand at c. €45 per sq.ft. • Retail sector showing signs of recovery with increased activity in prime high street locations and in the major shopping centres Source: SSgA Ireland, Lisney, There is no guarantee that the estimates will be achieved. IREPRS-0897 7 UK Investment Market Performance December 2003 – June 2014 Source: SSgA Ireland, Bloomberg/IPD, Past performance is not a guarantee of future results IREPRS-0897 8 United Kingdom Market Overview Investment Markets: • UK market recording strong performance with a total return of 16.4% in the year to end June 2014 (Source: IPD) • Competition for prime London investment has driven yields down • Yield contraction in prime markets has encouraged investors to seek value in the regions Office Occupational Markets: • Strong levels of take-up leading to reduced availability in central London offices • Most regional markets experiencing improved levels of take-up in the first half of 2014 • Falling office vacancy levels across the UK are leading to a return of pre-letting activity and some speculative development Source: SSgA Ireland, IPD and CBRE, Past performance is not a guarantee of future results. IREPRS-0897 9 Important Considerations for Property Funds • Property is a Medium to Long Term Investment • Diversification • Quality is key (Location/Buildings/Tenants/Leases) • Asset Manager’s Experience and Track Record • Clearly Defined Strategy Diversification does not ensure a profit or guarantee against loss. IREPRS-0897 10 Important Risk Disclosures The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSgA’s express written consent. State Street Global Advisors Ireland Limited is regulated by the Central Bank of Ireland. Incorporated and registered in Ireland at Two Park Place, Upper Hatch Street, Dublin 2. Registered number 145221. Member of the Irish Association of Investment Managers. The value of investments can fall as well as rise. Past performance may not be a reliable guide to future performance. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. Investing involves risk including the risk of loss of principal. This document may contain certain statements deemed to be forward-looking statements. All statements, other than historical facts, contained within this document that address activities, events or developments that SSgA expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions and analyses made by SSgA in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances, many of which are detailed herein. Such statements are subject to a number of assumptions, risks, uncertainties, many of which are beyond SSgA’s control. Please note that any such statements are not guarantees of any future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The information provided does not constitute investment advice as such term is defined under the Markets in Financial Instruments Directive (2004/39/EC) and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any investment. It does not take into account any investor's or potential investor’s particular investment objectives, strategies, tax status, risk appetite or investment horizon. If you require investment advice you should consult your tax and financial or other professional advisor Diversification does not ensure a profit or guarantee against loss. IREPRS-0897 11 Important Risk & Fund Disclosures Investing in foreign domiciled securities may involve risk of capital loss from unfavourable fluctuation in currency values, withholding taxes, from differences in generally accepted accounting principles or from economic or political instability in other nations. Investing in REITs involves certain distinct risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of credit extended. REITs are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs, especially mortgage REITs, are also subject to interest rate risk (i.e., as interest rates rise, the value of the REIT may decline). There are risks associated with investing in Real Assets and the Real Assets sector, including real estate, precious metals and natural resources. Investments can be significantly affected by events relating to these industries. The State Street Global Advisors Exempt Property Unit Trust is only available to Irish Revenue approved pension schemes and charities. This document should be read in conjunction with its Key Features Document and Supplement. All transactions should be based on the latest available Key Features Document and Supplement which contain more information regarding the charges, expenses and risks involved in your investment. Prospective investors may obtain the current Key Features Document and Supplement free of charge from State Street Global Advisors Ireland Limited, Two Park Place, Upper Hatch Street, Dublin 2. Telephone: 353 (0)1 7763000. Facsimile: 353 (0)1 7763300 or at www.ssga.com. The views expressed in this material are the views of SSgA Real Estate Team through the period ended 30 September 2014 and are subject to change based on market and other conditions © 2014 State Street Corporation — All Rights Reserved. Tracking Number: IREPRS-0897 Expiration Date: 31 October 2015 IREPRS-0897 12
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