The SFP AST Global Core Property Hedged CHF fund (Class C) achieved a net yield of 2.61% in the third quarter of 2021, which is its best quarterly performance since the launch. The one-year net yield currently stands at 7.37%.
These strong yields were achieved thanks to substantial rental income and capital inflows in the residential, logistics and R&D sectors. These sectors mainly benefited from low vacancy rates, above-average demand and increased rental income.
We have a well-balanced exposure in a variety of regions and sectors, which allows for significant benefits in terms of diversification.
Outlook
Our allocations in the US and Europe are slightly more substantial than our position in the APAC region. This is because we find the core real estate markets in the US and Europe to be more transparent and liquid than the Asian market. The APAC region is improving in both of these respects, and we are increasing our exposure in line with this trend.
We have maintained our broad diversification between sectors as well as our target allocations. We have set ourselves the target of increasing the share of residential property to 30% in order to stabilise yields in the long term. The residential sector has historically had a higher Sharpe ratio than all the other sectors, boasting low vacancy rates and surplus demand.
We are convinced that we will continue to achieve our long-term target yield of between 4.00% and 6.00% p.a. (hedged in CHF).
