Kempen European Property Fund NV

Profile

Kempen European Property Fund N.V. (KEPF) has the objective to achieve strong relative investment results by investing in a portfolio of listed European property companies. KEPF is managed on the basis of a bottom-up stock picking approach.

KEPF's strategy is to exploit mispricing between the valuation of property companies in relation to the quality of their real estate portfolios, balance sheets, corporate governance and management capability to add value to the property portfolio.

Management team

Matthijs Storm, Egbert Nijmeijer, Lucas Vuurmans, Anna Niegowska, Jorrit Arissen, Dan Petrisor

Performance per 2018-10-31 (rebased)

No chart data available

Performance per 2018-10-31

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  Fund Benchmark
1 month -2.8 % -3.1 %
3 months -5.6 % -5.6 %
This year -2.2 % -2.8 %
2015 21.5 % 18.0 %
2016 -3.8 % -5.3 %
2017 13.4 % 12.4 %
1 year (on annual basis) 3.9 % 1.9 %
3 years (on annual basis) i 0.7 % -0.5 %
5 years (on annual basis) i 9.9 % 8.7 %
Since inception (on annual basis) i 5.7 % 7.9 %
Untill 2014 the benchmark was the GPR 250 Europe Index, in which the UK component was reduced to 20%. Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. The value of your investments may fluctuate. Past performance provides no guarantee for the future.
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 349.81 M 2018-10-31
Share class size
EUR 349.81 M 2018-10-31
Number of shares
21,090,161 2018-10-31
Net Asset Value i
EUR 16.25 2018-11-21
Transaction price i
EUR 16.22 2018-11-21
Morningstar rating â„¢

Fund characteristics per 2018-10-31

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  Fund Benchmark
Number of holdings 29 107
Dividend yield i 2.93 % 3.40 %
Weighted average market capitalization i EUR 7,238 M EUR 8,029 M
P/E ratio i 4.34 7.33
Active share i 55.38 %
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Market developments per 2018-10-31

European property stocks were down in October with KEPF outperforming its benchmark. Relative performance was created in the cluster European Retail whilst relative performance was lost in the cluster UK. In the retail cluster the Dutch real estate companies performed well after their Dutch government announced that the abolishment of the dividend-withholding tax was of the table. Therefore the Dutch REIT status remains untouched and real estate companies keep their tax efficient structure. In the UK, the Fund’s underweight position in Intu attributed negatively after Brookfield confirmed it is considering a bid on the company. Forecasting M&A activity is not a parameter in our investment process which can create underperformance when companies are taken over. We note in this case that the long-term underweight position in Intu has created significant outperformance in the past years for the Fund.

Equities showed poor performance during October and so did European listed real estate, albeit better than general equities. Despite poor absolute returns, European storage company Shurgard managed to float through an IPO. The strategy participated in this offering as we believe the long-term fundamentals for storage in Europe are appealing. Urbanization and rising house prices, increasing consumer awareness and corporate urban infill location demand combined with limited supply and fragmented ownership help build the investment case. Shurgard finished 8% higher versus its IPO price in a down market. In the UK, next to a bid for retail laggard Intu properties, several office transactions took place at firm pricing, underpinning the valuation of London office stocks where the strategy has exposure (Derwent London, Land Securities). Retail remains a tough place to be although Unibail’s and Klépierre’s Q3 results were encouraging showing >2% sales growth and decent progress on disposals. Wereldhave’s disposal of Finnish regional mall Itakeskus took place at a -20% discount to last valuation showing polarization in performance between different asset qualities remains in the retail sector.

Portfolio developments per 2018-10-31

The Kempen real estate investment process strikes the balance between qualitative and quantitative analysis. Through application of data-analysis technology our Real Estate Team collects over 20 million relevant data points for 200,000 properties around the globe, processing these data in our data infrastructure and turning it into valuable fundamental investment information. The vast increase in available data helps us to make better assessments of the quality and risk of each real estate investment. This leads to better investment decisions and results in higher investment returns at lower risk for our clients.

The investment process contains three key qualitative parameters that determine the warranted valuation: management added value, balance sheet strength and ESG. The portfolio managers score each company covered on these three parameters. Companies that excel in ESG for example will be assigned a higher score and hence the warranted price increases. For real estate buildings specifically a lack of ESG management or exposure to climate risk areas results in higher maintenance capex and potentially higher vacancy of a portfolio.

Portfolio construction of the Strategy is based on cluster neutrality. The European portfolio has 6 clusters defined as homogeneous groups of real estate companies with similar underlying currency exposure. Examples are United Kingdom, European Residential and Switzerland. The portfolio weight of each cluster is approximately equal to the cluster’s benchmark weight. This ensures a diversified portfolio and neutralizes currency and macro-economic exposure versus the benchmark. The fund assigns its risk budget on the real estate portfolio level.

In the UK we reduced the portfolio weight in Tritax and reinvested proceeds into Safestore and Unite Group. In European offices we reduced weight in Alstria and reinvested in NSI on valuation grounds.
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Performance per 2018-10-31 (rebased)

No chart data available

Performance per 2018-10-31

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  Fund Benchmark
1 month -2.8 % -3.1 %
3 months -5.6 % -5.6 %
This year -2.2 % -2.8 %
2015 21.5 % 18.0 %
2016 -3.8 % -5.3 %
2017 13.4 % 12.4 %
1 year (on annual basis) 3.9 % 1.9 %
3 years (on annual basis) i 0.7 % -0.5 %
5 years (on annual basis) i 9.9 % 8.7 %
Since inception (on annual basis) i 5.7 % 7.9 %
Untill 2014 the benchmark was the GPR 250 Europe Index, in which the UK component was reduced to 20%. Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Dividends

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Distributing
Yes
Last dividend
EUR 0.62
Ex-date last dividend
2018-02-05
Number of distributions per year
1
Dividend calendar

Risk analysis (ex post) per 2018-10-31

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  3 years Since inception
Maximum drawdown i -12.65 % -74.77 %
Tracking error i 1.85 % 4.64 %
Information ratio i 0.64 -0.48
Beta i 1.01 1.05
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Top 5 contribution (2018-10-31)

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  Contribution i Performance i
Vastned Retail 0.20 % 6.71 %
Shurgard Self Storage Europe 0.16 % 7.76 %
Derwent London 0.13 % 2.97 %
Eurocommercial Properties 0.13 % 3.68 %
PSP Swiss Property 0.08 % 1.79 %

Bottom 5 contribution (2018-10-31)

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  Contribution i Performance i
Gecina -0.83 % -9.81 %
Unibail-Rodamco-Westfield -0.71 % -7.50 %
Grainger Trust -0.30 % -9.27 %
Land Securities -0.21 % -3.04 %
Deutsche Wohnen -0.18 % -2.13 %

Geographic allocation (2018-10-31)

27.7 %
United Kingdom
22.6 %
Germany
16.8 %
The Netherlands
12.5 %
Nordics
7.8 %
France
5.4 %
Switzerland
2.8 %
Ireland
2.2 %
Belgium
1.2 %
Spain
0.9 %
Other
Totaal
100 %
On basis of country of exchange of the investments. The cash position is included in ‘Other’.

Top 10 holdings (2018-10-31)

9.6 %
Deutsche Wohnen
9.5 %
Unibail-Rodamco-Westfield
7.8 %
Gecina
7.0 %
Land Securities
4.7 %
British Land
4.6 %
Vonovia SE
4.4 %
Derwent London
4.1 %
PSP Swiss Property
3.5 %
Eurocommercial Properties
3.4 %
Kojamo OYJ
Totaal
58.7 %

Sector allocation (2018-10-31)

30.1 %
Residential
29.7 %
Offices
24.9 %
Retail
12.0 %
Industrials
3.3 %
Other
Totaal
100 %
On basis of 'look through' data. The cash position is not included.
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Ongoing charges

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Management fee i
0.63 %
Service fee i
0.20 %
Expected ongoing charges i
0,83 %
Ongoing charges last financial year i
0.91 %
The Ongoing Charges Figure of the last financial year relates to 2016/2017.

The service fee is determined annually on basis of the net asset value as of the last day of the previous financial year:
< or equal to EUR 200 million: 0.25%
>EUR 200 million: 0.20%
The service fee has been decreased by 0.05% as of 1 October 2018. The expected ongoing charge factor of Fiscal Year 2018/2019 is therefore also decreased by 0.05%.

Other costs

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Upward swing factor i
0.40 %
Downward swing factor i
0.20 %
As of 1 January 2018 the swing factor has been adjusted from 0.35%/0.35% to 0.40%/0.20%.
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Share class details

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Investor type
Institutional & Private
Distributing
Yes
Benchmark i
FTSE EPRA/NAREIT Developed Europe Index (dividends reinvested)
Investment category
Real Estate
Universum
European real estate equities
Inception date
2000-10-26
Domicile
The Netherlands
May be offered to all investors in
The Netherlands
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Management company
Kempen Capital Management N.V.
Custodian
BNP Paribas Securities Services S.C.A.
Morningstar rating â„¢

Tradability

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Listed
yes, listed on the NAV Trading Facility of Euronext
Subscription/Redemption Frequency
Daily
ISIN i
NL0009296649
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under thelicense of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

KCM Vision

Kempen Capital Management is an asset manager with a long-term investment approach. We strongly believe in engaged shareholdership that benefits all stakeholders. As a long-term responsible investor, we firmly believe that active ownership and shareholder engagement contribute to positive change across the board.

Our KCM wide approach to responsible investment

To put our vision into action we engage with our investment targets on a wide array of strategic, financial, environmental, social and governance (ESG) topics. Our long-term investment worldview paired with thorough analysis and an experienced and diverse ESG team allow us to use both voting and engagement as means to consistently encourage positive change. Through this process of constructive engagement, we are able to contribute to the development of principles and standards of corporate responsibility within companies that we invest in. Our full voting records are available here.

Our fund approach to Responsible Investment

ESG is fully integrated in our investment process for the real estate funds. We believe financial and sustainability returns are indivisible and that those companies that can find the right balance between all stakeholders will drive value. In our investment framework there are three key aspects we look at in determining the warranted valuation: management value add, balance sheet and ESG. We are willing to pay up for those companies that excel in ESG. This believe is underpinned by academic literature.

We track the CO2 intensity for all companies in our universe and use this information to for our assumption for capital expenditure in valuing the real estate portfolio. We do not only invest in the ESG leaders but also in the laggards as we the potential value to be unlocked by providing capital to those who need it the most is massive

Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.