CBRE Pan European Core Fund

Overview Key strengths Key risks Growing and diversified €6.0 billion property portfolio as of Sept. 30, 2021 comprising mainly logistic premises (30.1% of the portfolio's gross asset value [GAV]), offices (26.8%), retail (20.4%) and residential assets (14.8%). Exposure to retail asset class, comprising mainly high street retail, (20.4% of GAV as of Sept. 30, 2021), one of the worst hit property segments by the COVID-19 pandemic. It is uncertain when and to what extent this segment will recover given long-term structural trends and sluggish recovery in tourism slowing recovery of high street footfall. High-quality portfolio in the main European city centers for its retail, office, and residential assets (which account for close to 62% of the portfolio's gross asset value

...S&P Global Ratings expects CBRE Pan European Core Fund (CBRE PEC Fund) will continue to mitigate the pandemic-induced drag on operating performance thanks to its good segment and geographic diversification. Despite another year of sluggish performance of its retail assets (representing 20.4% of portfolio GAV as of Sept. 30, 2021), we expect the fund's other property segments to continue to perform robustly in the coming two years, driving rental growth and sustained occupancy levels. In particular, we expect logistic assets (representing 30.1% of total portfolio value as of Sept. 30), to continue benefitting from supportive dynamics in the near term on structural changes in consumer demand exacerbated by the pandemic. We also take a positive view of the fund's exposure to residential assets (14.8% of portfolio GAV), which have proven to be resilient and uncorrelated to economic cycles, supporting cash flow stability and predictability. While we expect the recovery of retail asset performance...

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