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OUR COMPANY AFFILIATES

CBRE GROUP

CBRE Group, Inc. is the world’s largest commercial real estate services and investment firm, with 2018 revenues of $21.3 billion and more than 90,000 employees (excluding affiliate offices). CBRE has been included in the Fortune 500 since 2008, ranking #146 in 2019. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.

INVESTMENT SERVICES

CBRE Global Investors, combined with CBRE Clarion Securities and CBRE Caledon, is one of the world’s leading real asset investment managers with $106 billion in assets under management.

Built up over more than 40 years, our unparalleled platform is focused on real assets, giving our institutional clients access to real estate and infrastructure in the Americas, Europe and Asia Pacific. Our clients benefit from a complete range of investment solutions including equity and debt, direct and indirect, and listed and unlisted strategies.

Trammell Crow Company, founded in Dallas, Texas in 1948, is one of the nation’s oldest and most prolific developers of, and investors in, commercial real estate.The CBRE Global Investors and Trammell Crow Company platforms make up the Real Estate Investments division of CBRE Group.

The Real Estate Investments division is led by
Danny Queenan, Global CEO, Real Estate Investments.

BLOGS

Regularly released content on the state of the real estate and infrastructure industry are produced by our subject matter experts and shared on their blogs. A selection of them can be found below.

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Vieved 212 times

GLOBAL LISTED INFRASTRUCTURE

A Compelling Mix of Growth Potential & Relative Value
Q1 2018

We expect global listed infrastructure will deliver attractive total returnsin 2018, with a forecasted range of 10-12%. Listed infrastructurecontinues to trade at a discount relative to broad equities and theprivate infrastructure market. Also, secular demand is expected tocontinue to enhance the growth and total return potential of theasset class.

KEY TAKEAWAYS:

•Organic total returncombined with seculardemand support our10%-12% total returnexpectation.

•Listed infrastructuretrades at a discount toboth equities and privatemarket infrastructure.

•No changes to legislationare required to achieveour forecasted earningsgrowth of 9% over the nexttwo years.

VISIBLE BUILDING BLOCKS FOR GROWTH AND TOTAL RETURN

Listed infrastructure provides a defensive and stable growth profile. It is anchored by dividend income, inflation-linked revenues, and growth from the reinvestment ofcapital which increases the efficiency, duration, and/or productivity of existing assets.Also, secular trends enhance the total return potential of the asset class beyond whatmay be earned from its organic building blocks. Demand for renewable energyand wireless communication infrastructure are both excellent examples. The securrent trends represent how environmental consciousness and data proliferationare changing infrastructure investment demands that drive both short and long-termopportunities for the listed companies we own in our portfolios. The chart below is anillustrative example of our underwriting of listed infrastructure companies’ total return potential.

Source: CBRE Clarion. For illustrative purposes only. Not intended to provide current market analysis.

DISCOUNTED VALUATION RELATIVE TO EQUITIES

Relative to broad equities global listed infrastructure companies are trading at a multiple wellbelow their 10-year average. We believe that the growth outlook is very predictable and visibleover the next 3-5 years. Relatively modest leverage and the reasonable payout ratio of listedinfrastructure supports the defensive characteristics of the asset class. An allocation to listedinfrastructure may provide steady income and growth potential with less risk than general equities.

Relative to broadequities, globallisted infrastructurecompanies aretrading at a multiplewell below their10-year average.
Source: CBRE Clarion investable universe, FactSet, and Bloomberg as of 12/31/2017.
Global Listed Infrastructure Universe valuations are forecasts.
Higher valuations for listed companiesare supported by the premiums paid by private market investors for similar assets.
CHEAP RELATIVE TO THE PRIVATE MARKET

Private market demand for infrastructure assets has reached an unprecedented level. Risingdemand and prices in the private market may increase M&A activity involving listed companyassets, unlocking additional value for shareholders. Increased demand and competition haspushed transaction multiples in the private infrastructure market higher.

Our analysis of historical EBITDA multiples shows that listed market multiples are undervaluedwhen compared to private market transactions of similar assets. On average, listed infrastructuretrades at a discount to private market values (circa 11x EBITDA multiple vs. private marketvalues in the 14-16x range).

We are forecasting solid earnings growth across listed infrastructure sectors globally.
A CONSTRUCTIVE OUTLOOK

Looking ahead in 2018, listed infrastructure companies do not need a significant change fromcurrent political or regulatory frameworks to deliver attractive growth. Capital investment, akey driver of growth, is expected to continue to be robust in many sectors including gas utilities,water utilities, and airports. Moreover, volume exposed assets like transportation and midstreamenergy infrastructure should see increased growth due to rising economic activity.

We believe global listed infrastructure companies are attractively valued and well positionedto deliver compelling total returns. Our constructive outlook is supported by a 4% dividendyield, forecasted dividend growth of 7-8%, and estimated average earnings growth of over 9%globally over the next two years.

Source: CBRE Clarion as of 12/31/2017. Estimated earnings growth is based on a 2 year CAGR.

Global listed infrastructure has historically delivered attractive total returnswith above-average income and less risk relative to broad equities. Webelieve these defensive characteristics combined with the secular demanddrivers and the ongoing need for capital investment makes a compellingcase for a long-term allocation to the asset class.

IMPORTANT DISCLOSURES

©2018 CBRE Clarion Securities LLC. All rights reserved. The views expressed represent the opinions of CBRE Clarion which are subject to change and arenot intended as a forecast or guarantee of future results. Stated information is provided for informational purposes only, andshould not be perceived asinvestment advice or a recommendation for any security. It is derived from proprietary and non-proprietary sources which have not been independentlyverified for accuracy or completeness. While CBRE Clarion believes the information to be accurate and reliable, we do not claim or have responsibilityfor its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based onavailable information and management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are basedon assumptions which may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from thoseexpressed or implied in such statements.

Past performance of various investment strategies, sectors, vehicles and indices are not indicative of future results.Investing in infrastructure securities involves risk including to potential loss of principal. Infrastructure equities are subject to risks similar to those associated with the direct ownership ofinfrastructure assets. Portfolios concentrated in infrastructure securities may experience price volatility and other risks associated with non-diversification.While equities may offer the potential for greater long-term growth than some debt securities, they generally have higher volatility. International investmentsmay involve risk of capital loss from unfavorablefluctuation in currency values, from differences in generally accepted accounting principles, or fromeconomic or political instability in other nations. There is no guarantee that risk can be managed successfully. There are no assurances performance willmatch or outperform any particular benchmark. Indices are unmanaged and not available for direct investment. PA02092018