The Euro PIN Fund, our fictional fund that consists of 10 property-related companies based in countries that use the euro, made a loss of 1.1% in its third quarter (August to October). The fall was due to only one of the companies paying a dividend, sterling continuing to rise in value versus the euro, and possibly because it was due a slowdown after returning more than 30% in the previous 12 months.

In the 15 months since the Funds creation, the pound has gained 6.3% against the euro, rising from a rate of €1.11 to €1.18. However, despite this the Euro Fund has returned 26.6%, after FX losses, which is just over 5% per quarter.

Gecina down almost 10% despite Paris recovery
Gecina, one of three French companies in our Fund, has a huge office portfolio consisting of 1.5m sqm of space, two-thirds of which are located in Paris. The share fell by 9.7% in the three months to the end of October despite the firm reporting a ‘normalisation of the most central Paris rental markets, against the backdrop of an economic recovery that is encouraging for the Group’s outlook.’

However, the firm stated in its Q3 results, reported at the end of October, that it is still suffering from last year’s slowdown, but also indicated that things will improve going forward. The company stated: ‘The performance at the end of September 2021 still reflects the impacts of the slowdown in the volume of transactions during 2020, as well as a moderate level of indexation for rents due to a low rate of inflation in 2020, contrasting with the current observations for an upturn in economic activity that is already reflected in the real estate markets, especially in the most central sectors. The impacts of the recovery will gradually be reflected in the Group’s financial reporting over the coming half-year periods, supporting the outlook for growth in Gecina’s earnings in 2022 and 2023.’