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Real Estate & Construction

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Fundamentals

Size Analysis: At the end of the quarter, the industry's market capitalization stood at $1,783 billion, showing a slight decline relative to the prior quarter. Notably, approximately 167 companies exited the public company space, contributing to this decline. 

Public Market Dynamics: With an increase in performance compared to 2023 Q1, the industry continued to outpace the SPY. The top 20 companies exhibited a similar trend, with a slight performance dip during the quarter but remaining ahead of the market. The bottom 20 companies showed improved performance over the quarter. The median debt-to-equity ratio increased slightly. Overall revenue declined during the quarter, and there were slight declines in net profit margin, gross profit margin, and operating expenses as a percentage of revenue.

Transaction Trends: The quarter witnessed 1508 transactions with a cumulative value of $135 billion. This represented an increase relative to the previous quarter. The majority of transactions occurred in the Real Estate and Development sector, followed by Equity and Real Estate Investment Trusts. Overall activity in the industry increased, with an incline observed in M&A transactions, public offerings, and private placements. Public offerings outnumbered private placements.

Dispersion Insights: Asia emerged as the major contributor to revenue, followed by Oceania, although both regions experienced declines relative to the past quarter. Revenue has shown fluctuations over the past year and declined compared to 2022 Q1. The majority of M&A activity took place in the North America region, followed by Europe and Africa. However, Asia recorded more public offerings and private placements.

Methodology

We screened CapitalIQ using its industry classification. Transactions were filtered by announce date within the last 3 years. Companies were filtered by having a public company type. The main industries selected were "Materials" and "Real Estate". CapitalIQ sectors "Materials", "Equity Real Estate Investment Trusts (REITs)", and "Real Estate Management and Development" were used as categories. CapitalIQ subsectors "Biotechnology", and "Life Sciences Tools and Services" were used as categories. Our sectors were defined by keywords from the CapitalIQ market intelligent industry classification and CapitalIQ primary industry classification. Our Materials' sectors were defined by keywords from the CapitalIQ market intelligent industry classification. Our Real Estate's sectors were defined by keywords from the CapitalIQ primary industry classification.

THIS REPORT IS NOT TO BE USED OR CONSIDERED UNDER ANY CIRCUMSTANCE BY ANYONE AS INVESTMENT ADVICE

This research report is for informational and discussion purposes only. Information presented here is not investment advice of any kind to any person and does not constitute a recommendation as to the purchase or sale of any interests or as to any other course of action. General, financial, and statistical information concerning the details of this report and related industry are from sources Spaulding Financial believes to be reliable.

Spaulding Financial has accurately reflected such information in this research report; however, Spaulding Financial makes no representation as to the sources’ accuracy or completeness and has accepted this information without further verification. Neither all nor any part of the content of this report may be conveyed to the public through advertising, public relations, news, sales, mail, direct transmittal, or other media without the prior written consent of Spaulding Financial. Spaulding Financial ’s research is as of the date reported herein.

Spaulding Financial has no affiliation with any of the companies comprising the industry used as a basis for research in this report, nor does Spaulding Financial hold any investments in the companies listed herein. The content of this report may be used, in part, as a basis for any work that Spaulding Financial performs for you in the future at the sole discretion of Spaulding Financial. All data is from Capital IQ database.

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