IGR CBRE Global Real Estate Income Fund

 

 

 

 

 

 

 

 

 

Form is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule under the Investment Company Act of 1940 (17 CFR The Commission may use the information provided on Form in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 

 

 

 

 

 

 

 

Annual Report

 

CBRE Global Real Estate

Income Fund

 

2023

 

 

 

 

 

 

 

 

 

CBRE Global Real Estate Income Fund (the “Trust”), acting in accordance with an exemptive order received from the Securities and Exchange Commission and with approval of its Board of Trustees (the “Board”), has adopted a managed distribution policy with the purpose of distributing over the course of each year, through periodic distributions as nearly equal as practicable and any required special distributions, an amount closely approximating the total taxable income of the Trust during such year plus, if so desired by the Board, all or a portion of the capital gains and returns of capital from portfolio companies received by the Trust during the year.

In furtherance of its policy, the Trust distributes a fixed amount per common share, currently $0.06, each month to its common shareholders. This amount is subject to change from time to time in the discretion of the Board. In an effort to maintain the Trust’s monthly distribution at a stable level, the Board recognizes that a portion of the Trust’s distributions may be characterized as a return of capital, particularly in periods when the Trust incurs losses on its portfolio securities. Under such circumstances, the Board will not necessarily reduce the Trust’s distribution, but will closely monitor its sustainability, recognizing that losses may be reversed and that, in subsequent periods, gains on portfolio securities may give rise to the need for a supplemental distribution, which the Trust seeks to minimize. In considering sustainability, the Board may consider realized gains that have been offset, for the purposes of calculating taxable income, by capital loss carryforwards. Thus, the level of the Trust’s distributions will be independent of its performance for a particular period, but the Trust expects its distributions to correlate to its performance over time. In particular, the Trust expects that its distribution rate in relation to its net asset value (“NAV”) will correlate to its total return on NAV over time. The Trust’s total return on NAV is presented in the financial highlights table.

Shareholders should not draw any conclusions about the Trust’s investment performance from the amount of the current distribution or from the terms of the Trust’s managed distribution policy. The Board may amend or terminate the policy without prior notice to shareholders. Shareholders should note that the managed distribution policy is subject to change or termination for a variety of reasons. Through its ownership of portfolio securities, the Trust is subject to risks including, but not limited to, declines in the value of real estate held by portfolio companies, risks related to general and local economic conditions, and portfolio company losses. An economic downturn might have a material adverse effect on the real estate markets and the real estate companies in which the Trust invests, which could result in the Trust failing to achieve its investment objectives and jeopardizing the continuance of the managed distribution policy. Please refer to the Trust’s Prospectus for a fuller description of the risks associated with investing in the Trust.

The views expressed represent the opinion of CBRE Investment Management Listed Real Assets LLC (“CBREIM”), which are subject to change and are not intended as investment advice or a guarantee of future results. This material is for informational purposes only. It is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and sources which have not been independently verified for accuracy or completeness. While CBREIM believes the information to be accurate and reliable, we do not claim or accept responsibility for its completeness, accuracy, or reliability. Statements of future expectations, forecasts, estimates, projections, and other forward-looking statements are based on CBREIM’s view at the time such statements were made. Accordingly, such statements are inherently speculative, as they are based on assumptions which may involve known and unknown risks and uncertainties. Any discussion of particular securities herein should not be perceived as a recommendation to purchase or sell any of those securities. It should not be assumed that investments in any securities discussed were or will be profitable. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in real estate securities involves risks including the potential loss of principal. Real estate equities are subject to risks similar to those associated with the direct ownership of real estate.

Portfolios concentrated in real estate securities may experience price volatility and other risks associated with While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is no guarantee of future results. FINRA compliance services: Foreside Fund Services, LLC.

 

 

 

 

		1H2023		2H2023		CY2023
REGION
North America 2		4.6%		6.7%		11.6%
Europe 2		-6.1%		27.9%		20.0%
Asia-Pacific 2		-4.9%		3.9%		-1.2%
Global Real Estate Common Stocks 3		1.0%		8.6%		9.7%
U.S. REIT Preferred Stocks 4		9.2%		5.2%		14.9%
80/20 Blend of Global Common Stock & U.S. Preferred Stock 5		2.7%		7.9%		10.8%

1

Global real estate stocks as measured by FTSE EPRA Nareit Developed Index – Net returned +15.6% during the fourth quarter, +8.6% during the second half of the year and +9.7% for the calendar year. The broader market as measured by the MSCI World Index (USD) returned +24.4% for the calendar year.

2

Regional allocations for the FTSE EPRA Nareit Developed Index – Net are determined based on classifications by CBRE Investment Management. North America regional performance excludes U.S. REIT preferred stocks and only represents U.S. common stocks within the FTSE EPRA Nareit Developed Index – Net.

3

Represented by the FTSE EPRA Nareit Developed Index – Net. The Index is an unmanaged market-weighted index consisting of real estate companies from developed markets, where greater than 75% of constituents’ EBITDA (earnings before interest, taxes, depreciation, and amortization) is derived from relevant real estate activities and is calculated net of withholding taxes. Investors cannot invest directly in an index.

4

Represented by the MSCI REIT Preferred Index, a preferred stock market capitalization-weighted index of certain exchange-traded preferred securities issued by U.S. equity and U.S. hybrid REITs. Investors cannot invest directly in an index.

5

Represented by the daily weighted average of the following indices: 80% FTSE EPRA Nareit Developed – Net and 20% MSCI Preferred Index. Investors cannot invest directly in an index.

 

 

 

year also contributed significantly on a relative basis. During 2H2023, we made the strategic decision to decrease our exposure to the data center sector, a material overweight at the start of the year, following the strong absolute performance in the first half of the year. Our constant underweight to the net lease sector was also a significant contributor for the year, however we did increase our exposure to the sector in 2H2023. Europe was the strongest region on an absolute basis and also had a positive impact on a relative basis. Our overweight allocation along with superior stock selection in Continental Europe resulted in positive relative performance in that region. Our overweight position to Unibail, up over +40% for the year, significantly contributed to absolute and relative performance. In Asia, we underperformed on a relative basis due most in part to an overweight allocation in Hong Kong. Hong Kong underperformed as weakness in the Chinese economy continued to weigh on Hong Kong markets. Positive stock selection in Australia and Japan REOCS did partially offset the negative impact from Hong Kong allocation.

In April of 2023, the Trust successfully completed a Transferable Rights Offering (the Offering) raising $117.6 million of additional capital. One of the primary goals of the Offering was to enhance the distribution and NAV appreciation potential of the Trust and we believe the capital was raised during a period of favorable market conditions. In the months following the close of the Offering, our portfolio management team patiently invested the capital in securities we believe offered historically attractive valuations and above total return potential.

The Trust, acting in accordance with an exemptive order received from the U.S. Securities and Exchange Commission (SEC), utilizes a managed distribution policy under which the Trust’s regular monthly distribution may include both income and, where applicable, realized capital gains. The Trust may pay distributions in excess of the Fund’s investment company taxable income and net realized gains. This excess would be a return of capital distributed from the Fund’s assets. In accordance with its distribution policy, and with the approval of its Board of Trustees (the Board), the Trust made total distributions of $0.72 per share during CY2023. The total annual distribution of $0.72 represents a 13.3% rate on the $5.43 share price and an 11.6% rate on the $6.20 NAV as of December 31, 2023. The Board continues to regularly review the level of the Trust’s distribution and the ability to sustain it.

The Trust continues to utilize leverage with the goal of delivering incrementally higher distributions to shareholders. The Trust’s leverage position was 25% on December 31, 2023, down from 30% on June 30, 2023.

The Trust’s investments remain well-diversified by property type and geography. On December 31, the Trust’s portfolio was approximately 94% invested in common stock securities (63% in the Americas, 19% in Asia-Pacific, and 12% in Europe) with 6% of the portfolio invested in preferred stock of U.S. real estate companies.

 

Geographic and Sector diversification are unaudited. Percentages presented are based on managed trust assets, which include borrowings. The percentages in the pie charts will differ from those on the Portfolio of Investments because the figures on the Portfolio of Investments are calculated using net assets of the Trust.

 

 

 

 

We believe the listed markets should benefit from central bank rate cuts in 2024 and remain attractively valued relative to fixed income, equities and private real estate. We estimate that REITs are trading at a double digit discount to our assessment of private market values. REITs rarely trade at such a wide discount to the private markets. These indications have typically preceded periods of strong returns.

 

Estimated Net Asset Value is calculated based on individual REIT only stocks followed by the firm’s research team and are considered as investible. Global, Country, and Sector NAV Premium Discounts are calculated using simple average with CBRE Investment Management’s proprietary models. Information is the opinion of CBRE Investment Management as of 12/31/2023, is subject to change and is not intended to be a forecast of future events, or a guarantee of future results, or investment advice. Forecasts and any factors discussed are not indicative of future investment performance.

High occupancies, long-duration leases and staggered lease terms support earnings stability. Higher construction costs support a healthy supply vs demand dynamic. Balance sheets and leverage levels for the public companies are in a position of strength relative to history. We project earnings growth of 3.0% in 2024 and dividend growth at least in line with earnings

 

 

 

 

Source: CBRE Investment Management as of 12/31/2023. “e” refers to “estimate” and “f” refers to “forecasts.” 2023 is represented by 2023/2022 and 2024 is represented by 2024/2023. The global average does not include the 2022 growth rates for the U.S. hotel sector due to the negative hotel growth in 2020 as a result of the pandemic. Earnings growth forecasts are calculated based on FFO Growth of US Towers and individual stocks followed by the firm’s research team and are considered as investible. Global, Country, and Sector FFO Growth is calculated using weighted averages. Forecasts are the opinion of CBRE Investment Management, which is subject to change and is not intended to be a guarantee of future results or investment advice. Forecasts are not indicative of future investment performance.

As private market asset owners manage the upcoming wall of debt maturities, we expect REITs to benefit from external growth opportunities that are accretive to earnings. Despite tighter lending standards overall, REITs have demonstrated access to capital not available to private real estate investors. M&A transactions have increased as REITs have access to capital as well as a cost of capital advantage compared with private market investors.

We believe real estate dividend yield remains attractive. Current income generated by listed property’s dividend yields remains an attractive investment characteristic of the sector.

We own a well-balanced portfolio of securities that have been screened for their growth prospects in combination with the quality of their business models, assets, balance sheets, and management teams. We are positive on property types, regions, and stocks that offer these qualities at reasonable valuations. In the United States, we are overweight malls, towers, storage, residential, hotels, industrial and healthcare. In Japan, we prefer diversified that provide earnings growth and resiliency at very attractive relative valuations. In Hong Kong, we are overweight diversified companies with a commercial bias and retail. In Australia, we prefer industrial, retail, and a few select diversified companies. In the U.K., we favor the storage sector, as well as attractively priced diversified companies. Within Continental Europe, we have a positive bias toward retail, office, and select diversified companies.

We believe active management can offer significant relative return potential at this time when investors have a unique opportunity to invest in listed real estate at attractive valuations. We think our “information advantage” and the disciplined use of our proprietary analytical tools will allow us to outperform a passive strategy in a variety of market environments over time. As we look ahead, we believe our portfolio is well-positioned to deliver relative outperformance.

We appreciate your continued faith and confidence.

Sincerely,

CBRE INVESTMENT MANAGEMENT LISTED REAL ASSETS LLC

 

 

 

 

Must be preceded or accompanied by a prospectus.

The views expressed represent the opinion of CBRE Investment Management Listed Real Assets LLC (“CBREIM”), which are subject to change and are not intended as investment advice or a guarantee of future results. This material is for informational purposes only. It is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and sources which have not been independently verified for accuracy or completeness. While CBREIM believes the information to be accurate and reliable, we do not claim or accept responsibility for its completeness, accuracy, or reliability. Statements of future expectations, forecasts, estimates, projections, and other forward-looking statements are based on CBREIM’s view at the time such statements were made. Accordingly, such statements are inherently speculative, as they are based on assumptions that may involve known and unknown risks and uncertainties. Any discussion of securities herein should not be perceived as a recommendation to purchase or sell any of those securities. It should not be assumed that investments in any securities discussed were or will be profitable. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in real estate securities involves risks including the potential loss of principal. Real estate equities are subject to risks like those associated with the direct ownership of real estate. Portfolios concentrated in real estate securities may experience price volatility and other risks associated with While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations.

Fund holdings and sector allocations are subject to change. For a complete list of holdings, please see the schedule of investments section.

 

 

 

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions paid on purchases and sales of fund shares, and (2) ongoing costs, including management fees and other Fund expenses. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.

The examples in the table are based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2023 to December 31, 2023).

 

The first line in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.

 

The second line in the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses (which is not the Funds’ actual return). The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only, and do not reflect any transactional costs. Therefore the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

 

 

 

 

 

 

Financial

Statements

 

 

 

 

 

Shares														Market value
								Real Estate Securities* – 125.4%
								Common Stock – 117.4%
								Australia – 4.8%
	830,420							Charter Hall Group						$	6,822,327
	1,525,133							Dexus							7,992,400
	2,931,273							Mirvac Group							4,180,332
	5,015,696							Scentre Group							10,233,181
	8,780,872							Vicinity Centres							12,222,951
															41,451,191
								Belgium – 2.2%
	167,362							Aedifica SA							11,767,439
	93,958							Cofinimmo SA							7,410,690
															19,178,129
								Canada – 4.8%
	176,498							Canadian Apartment Properties REIT							6,532,006
	728,500							Chartwell Retirement Residences							6,475,064
	939,900							H&R Real Estate Investment Trust							7,056,734
	850,000							RioCan Real Estate Investment Trust							12,002,882
	1,060,471							Tricon Residential, Inc.							9,650,286
															41,716,972
								France – 3.2%
	674,037							Klepierre SA							18,376,194
	130,279							Unibail-Rodamco-Westfield (a)							9,630,681
															28,006,875
								Germany – 1.1%
	105,598							LEG Immobilien SE (a)							9,252,627
								Hong Kong – 6.1%
	1,837,310							CK Asset Holdings Ltd.							9,223,550
	4,706,470							Link REIT							26,429,838
	2,348,000							New World Development Co. Ltd.							3,644,436
	4,382,000							Swire Properties Ltd.							8,866,640
	1,422,303							Wharf Real Estate Investment Co. Ltd.							4,808,677
															52,973,141
								Japan – 8.1%
	3,139							Activia Properties, Inc.							8,650,174
	7,321							AEON REIT Investment Corp.							7,342,810
	11,306							Japan Hotel REIT Investment Corp.							5,549,547

Shares														Market value
	24,096							Japan Metropolitan Fund Investment Corp.						$	17,416,530
	6,880							Kenedix Office Investment Corp.							7,847,241
	10,619							LaSalle Logiport REIT							11,449,057
	10,122							Orix JREIT, Inc.							11,954,270
															70,209,629
								Singapore – 4.9%
	3,822,800							CapitaLand Ascendas REIT							8,781,051
	11,760,444							CapitaLand China Trust							8,291,420
	9,348,612							CapitaLand Integrated Commercial Trust							14,599,455
	5,878,600							Frasers Logistics & Commercial Trust							5,125,002
	8,338,000							Keppel REIT							5,878,508
															42,675,436
								Spain – 1.5%
	1,142,990							Merlin Properties Socimi SA							12,701,853
								Sweden – 1.5%
	891,381							Castellum AB (a)							12,674,816
								United Kingdom – 5.5%
	1,200,719							British Land Co. PLC (The)							6,116,559
	2,598,836							Land Securities Group PLC							23,349,901
	829,603							Safestore Holdings PLC							9,348,950
	2,668,000							Supermarket Income REIT PLC							2,955,601
	2,696,061							Tritax Big Box REIT PLC							5,804,965
															47,575,976
								United States – 73.7%
	178,107							Alexandria Real Estate Equities, Inc.							22,578,624
	55,905							American Tower Corp.							12,068,771
	372,093							Apartment Income REIT Corp.							12,922,790
	154,739							AvalonBay Communities, Inc.							28,970,236
	791,471							Brixmor Property Group, Inc.							18,417,530
	652,710							Broadstone Net Lease, Inc.							11,239,666
	139,875							Camden Property Trust							13,888,189
	333,020							Crown Castle, Inc.							38,360,574
	741,425							CubeSmart							34,365,049
	941,762							Empire State Realty Trust, Inc., Class A							9,125,674
	7,111							Equinix, Inc.							5,727,128
	76,610							Essex Property Trust, Inc.							18,994,683

 

 

 

 

 

Shares														Market value
	666,620							Healthcare Realty Trust, Inc., Class A						$	11,485,863
	844,349							Healthpeak Properties, Inc.							16,718,110
	579,218							Host Hotels & Resorts, Inc.							11,277,374
	454,631							Hudson Pacific Properties, Inc.							4,232,615
	38,541							Hyatt Hotels Corp., Class A							5,026,132
	418,300							Independence Realty Trust, Inc.							6,399,990
	1,039,635							Invitation Homes, Inc.							35,461,950
	123,551							Kilroy Realty Corp.							4,922,272
	346,849							Kite Realty Group Trust							7,928,968
	316,068							National Storage Affiliates Trust							13,107,340
	800,659							Park Hotels & Resorts, Inc.							12,250,083
	696,892							Piedmont Office Realty Trust, Inc., Class A							4,954,902
	157,312							Public Storage							47,980,160
	278,710							Realty Income Corp.							16,003,528
	581,300							Retail Opportunity Investments Corp.							8,155,639
	505,000							Rexford Industrial Realty, Inc.							28,330,500
	44,335							SBA Communications Corp., Class A							11,247,346
	302,038							Simon Property Group, Inc.							43,082,700
	585,007							Spirit Realty Capital, Inc.							25,558,956
	262,148							Sun Communities, Inc.							35,036,080
	1,408,200							Sunstone Hotel Investors, Inc.							15,109,986
	413,305							Ventas, Inc.							20,599,121
	553,677							VICI Properties, Inc.							17,651,223
	166,582							Vornado Realty Trust							4,705,942
	64,442							Welltower, Inc.							5,810,735
															639,696,429
								Total Common Stock
								(cost $1,187,118,652)							1,018,113,074
								Preferred Stock – 8.0%
								United States – 8.0%
	245,403							Digital Realty Trust, Inc., Series J, 5.250%							5,435,676
	301,100							Digital Realty Trust, Inc., Series L, 5.200%							6,708,508

Shares														Market value
	282,200							Federal Realty Investment Trust, Series C, 5.000%						$	6,436,982
	405,900							National Storage Affiliates Trust, Series A, 6.000%							9,595,476
	383,644							Pebblebrook Hotel Trust, Series E, 6.375%							8,298,219
	541,950							Pebblebrook Hotel Trust, Series F, 6.300%							11,792,832
	262,125							Pebblebrook Hotel Trust, Series G, 6.375%							5,533,459
	143,517							Rexford Industrial Realty, Inc., Series B, 5.875%							3,375,520
	287,077							Summit Hotel Properties, Inc., Series E, 6.250%							6,246,796
	265,000							Sunstone Hotel Investors, Inc., Series H, 6.125%							5,763,750
								Total Preferred Stock
								(cost $75,288,919)							69,187,218
								Total Investments – 125.4%
								(cost $1,262,407,571)							1,087,300,292
								Liabilities in Excess of Other Assets – (25.4)%							(220,026,392	)
								Net Assets – 100.0%						$	867,273,900

 

 

 

 

 

 

The following is a summary of various inputs used in determining the value of the Trust’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical investments. Level 2 includes other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Trust’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.

The following is a summary of inputs used as of December 31, 2023. For information on the Trust’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.