JPMorgan Global Core JPM Glbl Core - JARU JPM Glbl Core - JARE - Net Asset Value and Update

JPMorgan Global Core Real Assets

16/06/2022 08:10

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RNS Number : 1185P  JPMorgan Global Core Real Assets Ld  16 June 2022

LONDON STOCK EXCHANGE ANNOUNCEMENT

 

JPMORGAN GLOBAL CORE REAL ASSETS LIMITED

 

QUARTERLY NET ASSET VALUE AND PORTFOLIO UPDATE

 

 

Legal Entity Identifier: 549300D8JHZTH6GI8F97

 

JPMorgan Global Core Real Assets Limited ("JARA" or "the Company") announces
an unaudited Net Asset Value ("NAV") as at 31st May 2022 of 101.84 pence per
share. During the quarter to 31st May 2022 the Company paid a dividend of 1
penny per share on 31st May 2022, bringing the total return for the quarter to
+8.26%.

 

JARA's portfolio is continuing to perform well since the Company has been near
fully invested. Across both public and private allocations, and measured in
local currency, JARA's real estate, infrastructure and transportation
allocations returned 2.2%, 2.6% and 0.1% respectively, over the three month
period. The 6.5% appreciation of the US dollar versus sterling over the
quarter* significantly assisted GBP returns. We are again pleased to see
JARA's portfolio deliver positive returns over what has been a very volatile
period for most asset classes.

 

 

* The GBP/USD exchange rate was 1.26030 as at 31st May 2022.

 

Dividends

 

JARA has now paid out 9 pence per share of dividends since IPO. The most
recent quarterly dividend of 1 penny per share was paid to investors on 31st
May 2022, representing an annualised yield of 3.92%*. The Board continues to
expect the ongoing yield to be within the target range of 4 - 6% on issue
price as set out in the Company's IPO prospectus.

 

* Based on JARA's closing share price as at 31st May 2022.

 

Issued Share Capital

 

No new shares were issued during the quarter. As at 31st May 2022, there were
217,407,952 shares in issue. Since its IPO in September 2019 JARA has seen its
share capital expand by 45.9%.

 

Portfolio Construction

 

As at   31st May 2022, the Company's portfolio was valued at £221.4 million
and was 99% invested. On 4th March 2022 and 24th April 2022 the Company
announced that $11.1 million and $8.2 million respectively of the Company's
committed capital was called and funded into the US Real Estate Mezzanine Debt
strategy. These investments were funded from cash and listed real assets and
there were no other significant asset allocation decisions or investments
during the period.Sector exposure Percentage of NAV.

 

                     Total Exposure  Private Asset Exposure  Public Asset Exposure
 Real Estate Equity  48%             40%                     7%
 Real Estate Debt    10%             7%                      3%
 Infrastructure      22%             17%                     5%
 Transportation      21%             18%                     3%
 Total               100%            82%                     18%

As at 31st May 2022. Numbers may not sum due to rounding.

 

Geographical exposure Percentage of NAV

 

                30.11.21  28.02.22  31.05.22
 North America  49%       54%              53%
 Asia Pacific   29%       29%              28%
 Europe         16%       16%              16%
 UK             1%        2%               2%
 Other          ~1%       ~0%              ~0%
 Total          96%       100%             100%

 

Geographical exposures only include invested capital. Numbers may not sum due
to rounding.

 

Private Asset Portfolio Metrics

The private assets have the most complete data set compared to the listed
portion of JARA's portfolio given their less consistent and non standardised
reporting; therefore below we have included the aggregated detail from the
private portion of JARA's portfolio to allow further analysis and comparison
on a time series basis. As at 31st May 2022 private asset exposure represented
82% of JARA's NAV up from 78% last quarter.

 

Investments

 

·    290 private investments and, at a more granular individual asset
level, look through exposure to 1,103 individual assets (28th February 2022:
1,023)

 

              30.11.21  28.02.22  31.05.22
 Investments  251       268       290
 Assets       957       1,023     1,103

 

Private Portfolio Operating Metrics

 

Discount Rates

 

·    The blended average discount rate is 7.2%. The asset level discount
rate will vary by strategy, with real estate currently having a blended rate
of 6.2% and Infrastructure and Transport being 8.6%. The discount rate will
change to some degree as new assets are acquired. The discount rates have
remained relatively stable over the last couple of quarters and changes are
primarily driven by portfolio acquisitions and disposals rather than a
changing of assumptions.

 

                                 30.11.21  28.2.22  31.05.22
 Portfolio discount rate         7.4%      7.3%     7.2%
 Property                        6.2%      6.1%     6.2%
 Infrastructure & Transport      8.8%      8.6%     8.6%

 

Lease Duration

 

·    5.5 years average lease duration in real estate and transportation,
with just 7% of JARA's portfolio leases due to expire in 2022.

 

                                  30.11.21  28.02.22  31.05.22
 Weighted Lease Duration (years)  4.7       4.4       5.5

 

Occupancy

 

·    97% occupancy of leased assets in real estate and transportation, of
which 98% paid income as expected in Q1 2022, in line with Q4 2021. At an
overall portfolio level, occupancy and income receipts are in line with what
the Manager expects as optimal portfolio performance.

 

            30.11.21  28.02.22  31.05.22
 Occupancy  98%       98%       97%

 

Loan To Value

 

·    31% portfolio weighted average loan to value across private assets.
The leverage reduction from last quarter was driven by the addition of Real
Estate Mezzanine Debt which is an unlevered strategy. Asset level LTVs will
vary by strategy with the real estate blended LTV of 21% and Infrastructure
and Transport blended LTV of 47%. The underlying strategies continue  to take
a conservative view on overall leverage use.

 

      30.11.21  28.02.22  31.05.22
 LTV  39%       39%       31%

 

Debt

 

·    2.9% blended average cost of debt across the strategies, with 79%
being fixed and 21% floating and a weighted average maturity of 5.5 years.

 

                   30.11.21  28.02.22  31.05.22
 Debt Cost         3.2%      3.0%      2.9%
 Fixed             82%       78%       79%
 Floating          19%       22%       21%
 Maturity (years)  5.9       5.7       5.5

 

Development Profile

 

·    The private asset portfolio had less than 3% exposure to development
assets. This allocation allows the Manager, where appropriate, to capitalise
on areas where construction is a more effective way to gain access due to the
rich pricing or due to a preference for newer, more technologically advanced
assets. Currently the development allocation is mainly focused on three areas;
logistics assets, US multifamily residential and energy logistic
transportation. Each underlying strategy has the capacity to engage in a small
degree of development and this demonstrates the strength and flexibility of
the JPM Alternatives Platform.

 

We would expect construction exposure across JARA's portfolio to remain
relatively low on an aggregate basis.

 

                            30.11.21  28.02.22  31.05.22
 Development Risk Exposure  <3%       <3%       <3%

 

Currency

 

The main currency exposures of the portfolio (including liquidity funds) are
as follows:

 

 Currency          30.11.21  28.02.22  31.05.22
 USD               60%       64%       63%
 EUR               10%       9%        8%
 AUD               8%        7%        7%
 JPY               6%        6%        6%
 GBP               5%        1%        3%
 RMB               3%        3%        3%
 SGD               2%        3%        3%
 CAD               2%        2%        2%
 NZD               2%        2%        2%

Numbers may not sum to 100% due to rounding.

 

16th June 2022

 

 

Alison Vincent

JPMorgan Funds Limited - Company Secretary

Telephone 0207 742 4000

 

Notes

 

The Company aims to provide holders of the Ordinary Shares with a stable
income and constant currency capital appreciation through exposure to a
globally diversified portfolio of Core Real Assets in accordance with the
Company's investment policy. The Company is seeking exposure to Core Real
Assets through various real asset strategies, namely: Global Infrastructure,
Global Real Estate, Global Transport and Global Liquid Real Assets. J.P.
Morgan's Alternative Solutions Group has the primary responsibility for
managing the Company's portfolio.

 

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