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. The environmental, social and governance (ESG) criteria are incorporated in the investment process.

Management team

Jorrit Arissen, Egbert Nijmeijer, Lucas Vuurmans, Robert Stenger, Mihail Tonchev, Andreas Welter, Alex Williamson

Performance per 2022-04-30 (rebased)

No chart data available

Performance per 2022-04-30

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  Fund Benchmark
1 month -4.6 % -5.5 %
3 months -5.1 % -7.0 %
This year -7.9 % -9.9 %
2019 32.8 % 28.5 %
2020 -8.0 % -10.7 %
2021 22.9 % 17.9 %
1 year (on annual basis) 8.0 % 1.7 %
3 years (on annual basis) i 6.4 % 2.7 %
5 years (on annual basis) i 6.3 % 3.6 %
Since inception (on annual basis) i 6.0 % 7.3 %
Until 2014 the benchmark was the GPR 250 Europe Index, in which the UK component was reduced to 20%. From 2014 to September 30 2021, the benchmark was the FTSE EPRA Nareit Developed Europe Index. 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 134.82 M 2022-04-30
Share class size
EUR 134.82 M 2022-04-30
Number of shares
7,286,112 2022-04-30
Net Asset Value i
EUR 17.72 2022-05-20
Transaction price i
EUR 17.70 2022-05-20
Morningstar rating â„¢

Fund characteristics per 2022-04-30

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  Fund Benchmark
Number of holdings 29 107
Dividend yield i 3.19 % 3.11 %
Weighted average market capitalization i EUR 5,765 M EUR 7,679 M
P/E ratio i 17.37
Active share i 61.68 %
Kempen Capital Management N.V. (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 Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

Developments per 2022-04-30

KEPF posted a positive absolute and relative return during March. The Euro Diversified cluster was the strongest performer in terms of absolute performance (+3.7%) as well as relative performance driven by to our large overweight position in Hibernia REIT, which received a takeover bid from Brookfield Properties. Euro Residential was the worst absolute (-8.4%) and relative performer driven by weakness in German residential names.

March saw the first positive month for European real estate with the benchmark returning close to +1.5%. There was a bit of a bounce-back observed from initial panic falling out from the Russian invasion in Ukraine. Whilst the situation is as volatile as ever, real estate is a local business, and barring outright further military expansion, we believe that the worst-case scenario for developed listed real estate is relatively limited in the near future. The risk of continued rising rates in an effort to subdue inflation is very real, and has the potential to challenge several real estate sub-sectors with limited CPI links or subdued pricing power on the ground.

Near the end of the month it was announced that Brookfield had made a cash offer for all outstanding Hibernia shares at a +36% premium over the last unaffected share price. Hibernia owns a prime office portfolio in Dublin and traded at a significant discount to both the KCM NAV and the reported NAV. Brookfield has been consolidating the office space over the past months with the acquisition of German focused Alstria in November last year, Belgium focused Befimmo during February and this month Hibernia in Ireland. All companies traded at sustained and significant discounts to ours and reported NAVs and Brookfield is clearly taking the view that the right office assets, with strong tenants, would provide appealing future returns. The disconnect between private and public market valuations is something that Brookfield is clearly capitalizing on and it is also something that is benefitting KEPF as we held a significant overweight position in Hibernia and also in Alstria previously.

The Kempen real estate investment strategy 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 real estate buildings around the globe, processing this quantitative data in our data infrastructure and turning it into valuable fundamental investment information. The continuous increase in available data helps us make better assessments of the quality, value 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.
Next to the quantitative approach the investment strategy 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 valuation for an investment increases.

Portfolio construction of the Strategy is based on cluster neutrality. The European portfolio has 5 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. KEPF assigns its risk budget on the real estate portfolio level only.
This month we initiated an engagement with Swedish, Stockholm focused mixed use commercial landlord Atrium Ljungberg regarding its new environmental policy. We saw the new initiatives as a good progress especially with regards to Scope 3 measurements and the 2030 carbon neutrality targets. We provided feedback on next steps including TCFD reporting, verification of targets and potentially ESG targets worked into executive renumeration. We look forward to further engagements with this company.

During March we only made incremental changes to our existing holdings based on relative expected returns. In the Nordics we have been selling Norwegian office specialist Entra and adding Oresund specialist Wihlborgs in its place. We see the yield gap of prime Norwegian office yields to fixed income instruments closed and deem the former less attractive than before, despite the still strong CPI links and strong fundamentals on the ground.

Kempen Capital Management N.V. (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 Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

Performance per 2022-04-30 (rebased)

No chart data available

Performance per 2022-04-30

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  Fund Benchmark
1 month -4.6 % -5.5 %
3 months -5.1 % -7.0 %
This year -7.9 % -9.9 %
2019 32.8 % 28.5 %
2020 -8.0 % -10.7 %
2021 22.9 % 17.9 %
1 year (on annual basis) 8.0 % 1.7 %
3 years (on annual basis) i 6.4 % 2.7 %
5 years (on annual basis) i 6.3 % 3.6 %
Since inception (on annual basis) i 6.0 % 7.3 %
Until 2014 the benchmark was the GPR 250 Europe Index, in which the UK component was reduced to 20%. From 2014 to September 30 2021, the benchmark was the FTSE EPRA Nareit Developed Europe Index. 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 0.75
Ex-date last dividend
2022-02-28
Number of distributions per year
1
Dividend calendar

Risk analysis (ex post) per 2022-04-30

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  3 years Since inception
Maximum drawdown i -17.88 % -23.77 %
Tracking error i 3.20 % 4.44 %
Information ratio i 1.14 -0.28
Beta i 0.92 1.02
Kempen Capital Management N.V. (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 Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

Top 5 contribution (2022-04-30)

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  Contribution i Performance i
PSP Swiss Property 0.19 % 4.44 %
Grainger 0.12 % 2.17 %
Swiss Prime Site 0.08 % 4.67 %
Unite Group 0.01 % -0.03 %
Warehouses De Pauw SCA 0.01 % -3.38 %

Bottom 5 contribution (2022-04-30)

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  Contribution i Performance i
Vonovia SE -0.63 % -10.29 %
Fabege AB -0.61 % -13.55 %
Wihlborgs Fastigheter AB -0.44 % -9.70 %
Atrium Ljungberg -0.43 % -15.96 %
Gecina -0.41 % -5.85 %

Geographic allocation (2022-04-30)

33.5 %
United Kingdom
16.1 %
Germany
15.2 %
Nordics
11.0 %
Spain
9.0 %
France
7.5 %
Switzerland
5.2 %
Belgium
1.4 %
The Netherlands
0.6 %
Other
0.5 %
Ireland
Total
100 %
On basis of country of exchange of the investments. The cash position is included in ‘Other’.

Top 10 holdings (2022-04-30)

7.5 %
Gecina
7.1 %
LEG Immobilien
6.4 %
Merlin Properties Socimi
6.3 %
Grainger
4.8 %
Aedifica
4.7 %
PSP Swiss Property
4.6 %
Inmobiliaria Colonial SOCIMI
4.6 %
Derwent London
4.6 %
Vonovia SE
4.5 %
Safestore
Total
55.2 %

Sector allocation (2022-04-30)

36.8 %
Offices
28.2 %
Residential
18.3 %
Industrials
10.6 %
Other
6.1 %
Retail
Total
100 %
On basis of 'look through' data. The cash position is not included.
Kempen Capital Management N.V. (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 Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

Environmental and/or social characteristics promoted

The Kempen Global Property Fund, the Kempen (Lux) Global Property Fund and the Kempen European Property Fund (the “Funds”) fall under the scope of article 8 of the SFDR which means that the Funds promote environmental and/or social characteristics. This Sub-Fund will invest in a broad range of companies, of which some will have sustainability objectives.

The Fund commits to the climate goals of the Paris Agreement, thereby contributing to the Sustainable Development Goals Affordable and Clean Energy (SDG 7) and Sustainable Cities and Communities (SDG 11). The climate goals commitment encompasses short-term (2025) objectives, a mid-term (2030) ambition and a long-term commitment to be net zero by 2050.

Fund carbon emission targets

Morningstar sustainability rating

ESG Investment process

The promotion of environmental and/or social characteristics is achieved through the consistent implementation of the funds ESG policy. The ESG policy is fully implemented in our strategy’s investment process across the three relevant pillars of: Exclusion, ESG integration and Active ownership.

In the investment process we assess the ESG profile of a company. We look at each company on a case-by-case basis, taking into account material risks in a given industry in combination with the company’s respective risk exposure, practices and disclosure. This includes an assessment of good governance practices. The investee companies are rated for governance aspects using external research as well as making internal assessments. Furthermore, we look into the company’s exposure to past controversies and future ESG opportunities. Based on the fundamental ESG analysis we form an opinion on the quality of a company’s ESG profile and award a score (1-5). We apply adequate due diligence measures when selecting the assets and such due diligence measures take into account sustainability risk and ESG related risks as it could help to enhance long-term risk adjusted returns for investors, in accordance with the investment objectives of the Fund.

Exclusion

In line with the general Kempen policy, the Global Property Fund and the European Property Fund excludes all companies on the KCM Exclusion- and Avoidance list. Companies that ‘Fail’ or are on ‘Watchlist’ marked against the criteria of the United Nations Global Compact are excluded.

Key figures

  Kempen criteria Additional criteria
Business conduct
Human Rights
Labour
Environment
Anti Corruption
Product involvement
Controversial Weapons
Tobacco
Thermal Coal
Tar Sands
Adult Entertainment
Alcohol
Animal Welfare & GMO
Gambling
Power Generation Nuclear
Power Generation Carbon Intensive
(Un)conventional Oil & Gas Extraction
Weaponry
Kempen Capital Management N.V. (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 Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

 

SWING FACTORS

An overview of the current swing factors are available here.

Ongoing charges

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Management fee i
0.630 %
Service fee i
0.25 %
Expected ongoing charges i
0.88 %
Ongoing charges last financial year i
0.88 %
The ongoing charges figure of the last financial year relates to 2020/2021.

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%

Other costs

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Upward swing factor i
0.35 %
Downward swing factor i
0.15 %
Kempen Capital Management N.V. (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 Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. 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 UCITS Daily Capped Index in euro (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
Administrator
BNP Paribas Securities Services S.C.A., Amsterdam branch
Management company
Kempen Capital Management N.V.
Depositary and custodian
BNP Paribas Securities Services S.C.A., Amsterdam branch
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 N.V. (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 Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.
Kempen Capital Management N.V. (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 Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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