SGH LaSalle Concentrated Global Property Fund update – September Quarter 2026

SGH LaSalle Concentrated Global Property Fund update: September Quarter 2026

In this September 2026 quarterly update for the SGH LaSalle Concentrated Global Property Fund, Portfolio Manager Paul Meierdierck reviews global listed property market performance, the impact of rising interest rates and investment opportunities across key regions and sectors. He also provides insights into the Fund’s positioning and the team’s outlook for GREITs.

 

Watch/Listen to the September 2026 SGH LaSalle Concentrated Global Property Fund update ⏬:

 

Transcript

SGH LaSalle Concentrated Global Property Fund – performance for the quarter

Property stocks ended the third quarter of 2026 down about 6%. Following strong total returns through the first half of the year despite higher interest rates, the pace and magnitude of interest rate increases proved to be a headwind in the third quarter, bringing total returns close to flat for the year-to-date period.

Among property markets, the United Kingdom outperformed, buoyed by continued M&A activity as Prologis, the world’s largest owner of industrial logistics space, agreed to acquire UK peer SEGRO. Continental Europe lagged due to higher gearing ratios among listed companies. Sectoral performance was driven mainly by the rate environment, with residential and net lease companies adversely impacted by lower initial yields and suppressed investment spreads, respectively. Meanwhile, hotels and industrial benefited from positive economic surprises.

The fund fell short of its reference benchmark during the quarter but remains more than 100 basis points ahead for the year.

Key drivers of performance for the fund

Regionally, our underweight to Japan and overweight to Canada were a drag, partly offset by our overweight to the UK and underweight to Australia. Among property sectors, our overweight to cell towers and underweight to malls were mostly offset by an underweight to healthcare and an overweight to billboards. In terms of stock selection, while we experienced strength across several sectors, including industrial and healthcare, these strong results were offset by less encouraging results in office.

Industrial selection was boosted by having traded into an owner of Southern California warehouses in the prior quarter. The company’s second quarter results highlighted improving rental fundamentals and significant improvements in capital allocation, including favourable execution on a joint venture sale.

While our call on firming market conditions for New York City office was proven prescient, these positive fundamental trends were overshadowed by idiosyncratic headwinds for a key holding in the fund. Unlike other funds, our program is not constrained by a benchmark and can therefore concentrate only on the best opportunities we identify globally and across property sectors.

Thanks to our disciplined portfolio construction, we expect mid-teens annualised returns over the next three years, well above benchmark returns. We continue to see attractive value in the UK and Canada, while the US presents a mixed bag of opportunities. Conversely, values in Japan appear stretched and have not adjusted sufficiently in the face of a dramatic rise in interest rates. In property, we see compelling opportunities where market participants are myopically focused on near-term growth when assigning cash flow multiples, ignoring long-term secular drivers of differentiated returns and the risks of achieving them.

For example, self-storage appears attractively priced in the listed markets, with US and UK companies alike trading at discounted multiples despite suppressed earnings at this point in the cycle. Higher interest rates have greatly reduced mobility, but despite rates continuing to move against us, rental rates have begun to inflect higher.

Moreover, today’s stock prices assign no value to the upside potential if rates move lower and drive more activity. Position changes in the fund were limited in the third quarter. However, we should never confuse a lack of activity with progress. We remain laser-focused on finding opportunities the listed market has afforded us to create alpha for our clients.

More than three-quarters of the way through 2026, we continue to see increased evidence of the positive inflection in business fundamentals for property companies that we have been anticipating and calling for all year. While higher interest rates increase interest costs, they also extend the tail of suppressed new supply, further strengthening the outlook for business fundamentals.

Given the uncertainty around how AI will affect businesses, we feel fortunate to be invested in an asset class with tangible value. These are the places where people live, shop, work, congregate, and connect, both physically and digitally. REITs possess the income characteristics that investors have traditionally found in fixed income, but with inflation protection in the form of growth, a feature which is increasingly valuable in today’s world.

Reasons to invest

Finally, our carefully curated portfolio is the byproduct of a differentiated strategy and disciplined process. I previously mentioned our anticipated value creation, but our strong track record validates that our process works. We’ve created tremendous alpha for our investors since inception, and we’ve done this with lower risk than the benchmark, consistently outperforming in both rising and declining markets.

*The text has been edited for clarity.

For more information about the SGH LaSalle Concentrated Global Property Fund, click HERE. Follow us on LinkedIn.

---

Disclaimer

This fund update has been prepared by SG Hiscock and Company trading as SGHiscock Investment Management, (SGHiscock), to provide general information only and is not intended to take the place of professional advice. It does not take into account the investment objectives, financial situation, or particular needs of any particular person.

Equity Trustees is the responsible entity for the SGH LaSalle Concentrated Global Property Fund. Neither SGHiscock, Equity Trustees nor any of its related parties provide any warranty of accuracy. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product. Follow the link for the full disclaimer:https://sghiscock.com.au/podcast-disclosures-and-disclaimers/.