QUARTERLY NET ASSET VALUE AND PORTFOLIO UPDATE

JPMorgan Global Core Real Assets Ld

21 September 2023

 

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 August 2023 of 95.37 pence per share. During the quarter, the Company paid a dividend of 1.05 pence per share on 30th August 2023, bringing the NAV total return for the quarter to -2.0% and to -8.0% for the preceding 12 months, while the total share price return for the 12 months to 31st August 2023 was -23.6%.

Further to the announcement on 10th August 2023 regarding the use of the share repurchase authority, the program's first repurchase was on 11th August 2023 and the Company repurchased 1,400,000 shares in the quarter to 31st August 2023. The shares were repurchased at a weighted average discount of c. 18.4%. The programme is ongoing.

An analysis of the components to this NAV and the relevant dates for their valuation is provided below:

Strategies

Name	Date of price for Strategy	% of JARA's NAV as at 31st August 2023
US Real Estate Equity	30th June 2023	20.5%
Asia-Pacific Real Estate Equity	30th June 2023	16.3%
US Real Estate Debt	30th June 2023	7.4%
Transportation	31st March 2023	19.5%
Infrastructure	30th June 2023	18.9%*
Liquid Strategy	31st August 2023	17.5%

*includes 1% (GBP2.4m) of non-unitised (i.e., held at cost) called capital.

Across both public and private allocations, and measured in local currency, JARA's real estate equity and debt exposure contributed -0.3%, whilst infrastructure and transportation contributed 1.0%. The US dollar delivered a drag to performance over the Company's quarter to 31st August 2023 due to its 2.2% decline versus sterling*.

The Company announced at the end of June an update to its hedging strategy. As of 3rd July 2023 JARA has been invested in the hedged vehicle of its Infrastructure allocation. The reallocation of the existing unhedged investment in Infrastructure to the hedged vehicle is intended to reduce the currency-related volatility in returns from the private infrastructure allocation. The resultant currency exposure as of 31st August 2023 is shown in the currency table below. The Company will consider further additional actions to reduce currency-related NAV volatility as appropriate.

* The GBP/USD exchange rate was 1.26715 as at 31st August 2023, versus 1.23940 on 31st May 2023 

Dividends

The most recent quarterly dividend of 1.05 pence per share was paid to shareholders on 30th August 2023. The Board continues to expect the yield to be within the target range of 4 - 6% on issue price, as set out in the Company's IPO prospectus. The current year's expected total dividends for the financial year ending 29th February 2024 of 4.20 pence per share represents a yield of 5.4% on the current market price* and 4.2% on issue price.

* Based on JARA's closing share price as at 31st August 2023.

Issued Share Capital

As at 31st August 2023, there were 218,007,952 shares in issue.

Portfolio Construction

As at 31st August 2023, the Company's portfolio was valued at £203.8 million and this includes £2.4m of non-unitised (i.e., held at cost) capital in the Infrastructure Strategy.

Sector exposure Percentage of NAV

	Total Exposure	Private Asset Exposure	Public Asset Exposure
Real Estate Equity	43%	37%	6%
Real Estate Debt	10%	7%	2%
Infrastructure	23%	19%	4%
Transportation	22%	20%	3%
Total	100%	83%	17%

As at 31st August 2023. Numbers may not sum due to rounding. Cash level at quarter end was 2%

Geographical exposure percentage of NAV

	28.02.23	31.05.23	31.08.23
North America	54%	54%		56%
Asia Pacific	28%	28%		26%
Europe	16%	15%		15%
UK	2%	2%		3%
Other	~0%	~0%		~0%
Total	100%	100%		100%

As at 31st August 2023. Numbers may not sum due to rounding.  

Private Asset Portfolio Metrics

Please see below for the metrics of JARA's private investments. As at 31st August 2023, private asset exposure represented 83% of JARA's NAV, stable compared to the previous quarter.

Investments

·    344 private investments and, at a more granular individual asset level, look through exposure to 1,409 individual assets (31st May 2023: 1,377)

	28.02.23	31.05.23	31.08.23
Investments	335	340	344
Assets	1,230	1,377	1,409

Private Portfolio Operating Metrics

Discount Rates

The blended average discount rate is 7.9%. The asset level discount rate will vary by strategy as detailed below. The average discount rate has risen marginally from 7.6% for the previous quarter. This was primarily driven by an increase in the infrastructure and transportation discount rates.

	28.02.23	31.05.23	31.08.23
Portfolio discount rate	7.9%	7.6%	7.9%
Property	7.5%	6.4%	6.5%
Infrastructure & Transport	9.2%	9.0%	9.3%

Lease Duration

·    4.7 years average lease duration in real estate and transportation, with c.10% expected to expire in 2023.

	28.02.23	31.05.23	31.08.23
Weighted Lease Duration (years)	4.8	4.8	4.7

Occupancy

·    96% occupancy of leased assets in real estate and transportation, with Q2 2023 collections being in line with expectations. At an overall portfolio level, occupancy and income receipts are in line with what the Manager expects.

	28.02.23	31.05.23	31.08.23
Occupancy	96%	96%	96%

Loan To Value (LTV)

·    38% portfolio weighted average loan to value across private assets. Asset level LTVs will vary by strategy, with the real estate average LTV of 33% and Infrastructure and Transport blended LTV of 49%. The underlying strategies continue to take a conservative view on overall leverage use.

	28.02.23	31.05.23	31.08.23
LTV	37%	37%	38%

Debt

·    4.3% blended average cost of debt across the strategies, with 78.6% being fixed and 21.4% floating and a weighted average maturity of 5.6 years.

	28.02.23	31.05.23	31.08.23
Debt Cost	3.7%	4.1%	4.3%
Fixed	77.4%	76.4%	78.6%
Floating	22.6%	23.6%	21.4%
Average Maturity (years)	5.2	5.8	5.6

Development Profile

Each underlying strategy has the capacity to engage in a small degree of development, with the private asset portfolio having a relatively minimal exposure to development assets. This small allocation allows the Manager, where appropriate, to capitalise on areas where construction is a more effective way to gain access to assets or sectors less accessible in the secondary market. The development pipeline has moderated more recently, especially in real estate. We would expect construction exposure across JARA's portfolio to remain relatively low on an aggregate basis.

Currency

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

Currency			28.02.23	31.05.23	31.08.23
USD			65%	65%	58%
GBP			2%	2%	20%
JPY			7%	7%	6%
AUD			5%	5%	4%
SGD			3%	3%	3%
RMB			3%	3%	2%
EUR			11%	10%	2%
NZD			2%	2%	1%
CAD			1%	1%	1%

Other currencies also represent 2% of NAV. Numbers may not sum to 100% due to rounding.

The above reflects the changes in currency exposure following the allocation to the hedged vehicle of the Infrastructure strategy on 3rd July 2023 as described above.

21st September 2023

Emma Lamb

JPMorgan Funds Limited - Company Secretary

Telephone [phone]

Notes

The Company aims to provide holders of the Ordinary Shares with a stable income and capital appreciation, measured on a constant currency basis, through exposure to a globally diversified portfolio of Core Real Assets in accordance with the Company's investment policy. The Company obtains 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.

 

END