Reitway Global | Monthly Commentary | April 2023

May 10 2023

  • Global real estate delivered 1.67% in USD terms, outperforming both global equities and global bonds.
  • Despite the turmoil our portfolio remains robust
  • There are sectors that provide shelter in our portfolio and companies that may capitalize on distress

Market Commentary

April proved to be a cautious month in the financial markets as investors remained wary in the aftermath of the March banking crisis. The shockwaves of the debacle, although seemingly contained for the moment, continued to cast a shadow of uncertainty over the global economy. As a result, markets remained subdued, with many investors adopting a wait-and-see approach to avoid potential risks. The S&P 500 delivered a monthly total return of 1.52% with a late rise following strong quarterly results from the mega caps such as Microsoft, Alphabet and Meta.

Global real estate, as measured by the GPR 250 REIT World Index, delivered 1.67% in USD terms, outperforming both global equities and global bonds. Digging into global real estate returns, healthcare was the sector leader as it returned +5.9%% for April and was predominantly guided by good performance in the US counters. The sector laggard of the month was self-storage which gave back some of its 1Q23 outperformance, producing a negative return of -2.4%.

Western Europe gave listed real estate investors something to smile about as it delivered +6.6% total return with the UK receiving the gold-medal for its stellar returns of +8.2%. UK growth was primarily underpinned by UK logistics as healthy fundamentals drove positive sentiment. The US market lagged, delivering a total return of +0.95%. The month was slightly weaker for Canada and Singapore that produced among the lowest returns ranging between +0.51% and +0.63% but was fortunately in the green.

The second half of April saw REITs begin the release of their first quarter results. Industrial continued to impress shareholders as companies saw mark-to-market rental growth on new leases reach their highest levels ever. Occupancies saw a mild decline as leasing activity slowed due to the uncertainty surrounding a potential recession later this year. Nonetheless, this was in line with management’s expectations at the end of 2022 and the decline in occupancies were offset by strong rental growth across the portfolios.

During the month, S&P Global revised their outlook on the UK’s sovereign credit rating, raising it from a negative outlook to stable. The negative label was slapped on by the ratings agency last year when Liz Truss announced the implementation of a “mini budget” that was perceived as highly inflationary during a period that was already experiencing price instability. This led to a negative response from the bond market and forced the British central bank to purchase billions of pounds worth of bonds to contain the fallout. In addition to the ratings change, the IMF adjusted their GDP forecasts up during the month off the back of lower energy prices but still believes the economy will experience a contraction in 2023 of ~0.3%.

Time is ticking for the US Government to raise the $31.4 trillion debt ceiling as the dreaded “x-date” approaches. The US government and House of Representatives have reached a deadlock on how to move forward. US House speaker, Kevin McCarthy, proposed a plan to allow the debt ceiling to be raised $1.5 trillion, but requires government spending to be cut by approximately three times the amount.

Joe Biden believes the proposal to be unfounded and should be able to raise the debt ceiling unconditionally just like his predecessor, Donald Trump had done three times before. Meanwhile, as negotiations continue, the markets have not responded kindly. 3-Month T-bill yields reached levels of 5.35% during the month achieving a new 22-year peak.

One Year Credit Default Swaps on US debt reached levels higher than those in 2011 during a very similar stand-off leading to the US sovereign credit rating being downgraded for the first time ever. “X-date” is forecasted for some time in August, however disappointing tax collections for April could bring the date to as early as June.

The BoJ maintained its “ultra-low” interest rates as Governor Ueda still awaits strong evidence that inflation can sustainably achieve the 2% target. However, the yield curve control (YCC) policy will be placed under review aiming to give the central bank more flexibility when the time arises for a policy tweak. Ueda emphasised that prematurely raising interest rates before reaching the desired inflation level could be far more detrimental to the economy than inflation exceeding 2% because of a lagged response.

US core CPI y/y arrived at 5.6% in line with expectations and higher than the prior month at 5.5% however core CPI m/m declined from 0.5% in February to 0.4% in March following the desired direction. US unemployment rate ticked downward by 10bps to 3.5% reflecting the ongoing resilience of the current labour market despite the pace at which interest rates have risen.

UK core CPI y/y disappointed analysts as it came in above expectations at 6.2% (20bps surprise) but held steady on the prior year. Tokyo CPI y/y moved up 20bps to 3.5% maintaining levels above the BoJ’s 2% target rate.

Towards the end of April, the FDIC placed First Republic bank under receiverships sending its shares into a freefall and extending the concerns around the banking sector. Despite the turmoil our portfolio remains robust and sheltered from a major fallout with low exposure to bank debt, favourable levels of leverage with an extended term to maturity that grant our companies the flexibility to capitalise on opportunities that may arise from distress.


If you would like to set up time to speak to us or for more information on any of our funds please contact [email protected] / 082 676 6115 or [email protected] / 060 587 5086





Although all precautions have been made to ensure the reliability of data and information contained in this presentation, Reitway cannot guarantee the reliability thereof. Past performance referred to in this presentation is not necessarily indicative of future performance. Similarly, forecasts contained in this presentation involve risks and uncertainties which may result in future performance, outcomes and results which differ materially from such forecasts. You are accordingly cautioned not to place undue reliance on any historical data, general information or forecasts used in this presentation.

Reitway accepts no liability whatsoever for any loss, damage (direct or consequential) or expense suffered by a recipient as a result of any reliance placed on any information contained in this presentation or any opinions expressed during this presentation. The views, opinions and comments reflected in the presentation represent those of Reitway, associated companies and employees.

Reitway Global (Pty) Ltd

Registration No: 2011/125542/07. A Financial Services Provider licensed under the Financial Advisory and Intermediary Services Act, 37 of 2002. FSP license No: 43747. The full details and basis of the awards are available from the manager


Boutique Collective Investments (RF) (Pty) Ltd (“BCI”) is a registered Manager of the Boutique Collective Investments Scheme, approved in terms of the Collective Investments Schemes Control Act, No 45 of 2002 and is a full member of the Association for Savings and Investment SA.

Collective Investment Schemes in securities are generally medium to long term investments. The value of participatory interests may go up or down and past performance is not necessarily an indication of future performance.  The Manager does not guarantee the capital or the return of a portfolio. Collective Investments are traded at ruling prices and can engage in borrowing and scrip lending.  A schedule of fees, charges and maximum commissions is available on request.  BCI reserves the right to close the portfolio to new investors and reopen certain portfolios from time to time in order to manage them more efficiently. Additional information, including application forms, annual or quarterly reports can be obtained from BCI, free of charge.

A feeder fund is a portfolio that invests in a single portfolio of collective investment schemes, which levies its own charges, and which could result in a higher fee structure for the feeder fund

Performance figures quoted for the portfolio are from Morningstar, as at the date of this document for a lump sum investment, using NAV-NAV with income reinvested and do not take any upfront manager’s charge into account.  Income distributions are declared on the ex-dividend date. Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividend withholding tax. Past performance referred to in this presentation is not necessarily indicative of future performance.

Investments in foreign securities may include additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information.

Boutique Collective Investments (RF) Pty Ltd retains full legal responsibility for the third party named portfolio.

Although reasonable steps have been taken to ensure the validity and accuracy of the information in this document, BCI does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in this document, whether by a client, investor or intermediary.  This document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidance in any form whatsoever.  Investors are encouraged to obtain independent professional investment and taxation advice before investing with or in any of BCI/the Manager’s products.

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