EFTA01377066.pdf

CIO Insights — August 2016 Alternatives 14 REITs Real Estate Post Brexit decision UK real estate valuations might $9bbn 11th ease. but most key markets remain Investors estimated to be Global Industry Classification Standard favorable underweight in the REIT sector sector from end August 2016 As regards real estate, this may Supply risk remains well below perform best when gross-domestic- average, with only a few exceptions product (GDP) growth is positive such as Singapore, Houston, and real interest rates are low. Our London, and some late-cycle supply post-Brexit referendum GDP growth in certain Australian markets. estimates are modestly lower for In the listed market, real estate may some markets, yet we do not expect become the eleventh Standard & real interest rates to rise. Globally, Poor's Global Industry Classification real estate could deliver average Standard sector in September to above-average returns in many 2016. We believe this could lead to markets. The U.K. might slow, but lower volatility and correlations over markets such as Australia, South time. Also, generalist investors are Korea, Germany, Spain and the U.S. estimated to be underweight the remain favorable. Real Estate Investment Trust (REIT) Outside of the U.K., we also don't sector by c. S95bn, which could see material valuation shifts. Initial provide support. REIT dividend yields yields (rents minus costs, divided by are now at 4.0 percent and well the property value) are stable while supported by underlying free-cash- bond yields have come down, thus flow yields of 5.0 percent. Payout spreads are wider. With property ratios are low by historical standards supply and demand remaining and provide an opportunity for high- balanced, we have upgraded our single-digit dividend growth in the return outlook in certain markets. near term. Source. Deutsche Asset Management June 24, 2016 Past ;xofotITUIIIM is not indicative of future returns. Readers should refer to the explanatory notes at the end of this document. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0073607 CONFIDENTIAL SONY GM_00219791 EFTA01377066