CBRE Global Real Estate Income FundNYSE: IGR

The CBRE Global Real Estate Income Fund offers a high yield of 11.13% and has consistently maintained or increased its distribution, making it attractive for income-focused investors. The fund's global diversification and leverage strategy have led to strong performance, with a 43.14% total return over the past five months. Despite a high expense ratio, the fund's performance justifies the costs, especially given its robust returns and international exposure.

IGR is a real estate CEF trading at a discount to NAV of -5.5% with a 13.3% annual yield. Fund managers have an optimistic outlook for global REITs in 2024, and potential catalysts for future performance as interest rates decline. Global REIT growth remains resilient, with strong returns expected in 2024 due to various factors like contractual rent increases and high occupancy rates.

The CBRE Global Real Estate Income Fund is a closed-end fund that focuses on investing in real estate equities and preferred securities, such as REITs. While the fund has a global focus, with a significant portion of its assets invested in international real estate markets, particularly in developed countries, its performance history is generally lackluster. Despite its attractive distribution yield, we believe there are more appealing investment options available in the real estate sector.

The CBRE Global Real Estate Income Fund provides access to the real estate sector and REITs with a yield of 14.52%. While it offers a higher yield compared to similar funds, there are doubts about its distribution sustainability. The fund's net asset value has decreased recently, and it depends on capital gains to support its distributions, which may not be viable in the future.

In our last article, we gave IGR an upgrade. That has played out and the fund has delivered a scintillating return since then. In this article, we give you three reasons as to why we are now downgrading IGR.

For the first month in four, both equity (+6.05% on a NAV basis) and fixed income (+5.81%) CEFs on average posted handsome plus-side returns. At month end, 9% of all CEFs traded at a premium to their NAV, with 10% of equity CEFs and 8% of fixed income CEFs trading in premium territory. Developed Markets CEFs (+8.93%), for the first month in eight, outpaced the other classifications in the equity CEF universe for November.

CBRE Global Real Estate Income Fund has performed poorly compared to its peers, and that leaves it on the list of potential distribution cutters. I believe Cohen & Steers Real Estate Opportunities and Income Fund and Cohen & Steers Quality Income Realty Fund offer better opportunities in the real estate and REIT space. The IGR closed-end fund otherwise offers a decent discount and added global exposure that could be seen as potentially worth the risks.

Real estate has been one of the worst-performing sectors in the U.S. equity market over the past three years. Global real estate market conditions are stabilizing, indicating a potential recovery in the sector. CBRE Global Real Estate Income Fund is showing signs of recovery and offers high current income and potential for capital appreciation.

CBRE Global Real Estate Income Fund is an equity closed end fund with a primary objective of high current income and secondary objective of capital appreciation. IGR invests in global REIT equity, with the U.S. making up only 62% of the collateral allocation. IGR has a high leverage ratio of 30% and is considered a high beta instrument, making it riskier but with potential for higher returns in a structural bull market.