UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-21465

 

 

CBRE Clarion Global Real Estate Income Fund

(Exact name of registrant as specified in charter)

 

 

201 King of Prussia Road,

Suite 600 Radnor, PA 19087

(Address of principal executive offices) (Zip code)

 

 

T. Ritson Ferguson, President and Chief Executive Officer

CBRE Clarion Global Real Estate Income Fund

201 King of Prussia Road, Suite 600

Radnor, PA 19087

(Name and address of agent for service)

 

 

Registrant’s telephone number, including area code: 1-888-711-4272

Date of fiscal year end: December 31

Date of reporting period: September 30, 2012

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q 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 the 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.

 

 

 

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Item 1.    Schedule of Investments.

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CBRE Clarion Global Real Estate Income Fund

Portfolio of Investments (unaudited)

September 30, 2012

 

 

 

Shares						Market Value ($)
				Real Estate Securities* - 98.6%
				Common Stock - 88.8%
				Australia - 14.3%
	5,453,037			CFS Retail Property Trust		$	10,944,283
	2,776,835			Charter Hall Retail Real Estate Investment Trust			9,904,573
	38,529,000			Dexus Property Group			38,062,989
	1,410,723			Goodman Group			5,809,362
	4,469,500			GPT Group			15,802,631
	4,102,827			Westfield Group			43,347,939
	10,284,262			Westfield Retail Trust			30,907,403
							154,779,180
				Canada - 12.0%
	200,100			Calloway Real Estate Investment Trust			6,074,482
	500,000			Crombie Real Estate Investment Trust(a)			7,729,051
	1,039,800			H&R Real Estate Investment Trust			26,619,810
	2,082,900			InnVest Real Estate Investment Trust			11,071,261
	440,000			InnVest Real Estate Investment Trust(a)			2,338,737
	700,000			Primaris Retail Real Estate Investment Trust(a)			17,344,377
	2,078,800			RioCan Real Estate Investment Trust			58,458,658
							129,636,376
				France - 4.6%
	65,700			Altarea			9,804,671
	351,122			Societe de la Tour Eiffel			18,434,624
	106,820			Unibail-Rodamco SE			21,314,445
							49,553,740
				Germany - 0.6%
	167,161			GSW Immobilien AG			6,206,417
				Hong Kong - 3.9%
	8,913,000			Link REIT (The)			42,247,154
				Japan - 3.1%
	840			Activia Properties, Inc.(b)			5,160,926
	620			Frontier Real Estate Investment Corp.			5,442,930
	12,852			Japan Retail Fund Investment Corp.			23,044,396
							33,648,252
				Netherlands - 2.8%
	118,455			Corio NV			5,041,900
	357,401			Eurocommercial Properties NV			13,559,391
	277,161			Vastned Retail NV			11,780,991
							30,382,282

See previously submitted notes to financial statements for the semi-annual period ended June 30, 2012.

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CBRE Clarion Global Real Estate Income Fund

Portfolio of Investments (unaudited) (continued)

September 30, 2012

 

 

Shares				Market Value ($)
		New Zealand - 0.7%
9,050,000		Goodman Property Trust		$	7,668,192
		Singapore - 5.6%
6,735,000		Ascendas Real Estate Investment Trust			13,231,719
16,748,000		CapitaMall Trust			27,578,838
6,761,600		Global Logistic Properties Ltd.			13,835,181
4,757,000		Suntec Real Estate Investment Trust			5,758,657
					60,404,395
		United Kingdom - 3.6%
1,939,300		Land Securities Group Plc			23,846,984
4,045,110		Segro Plc			14,814,669
					38,661,653
		United States - 37.6%
795,353		Brandywine Realty Trust			9,695,353
826,200		Camden Property Trust			53,281,638
666,632		CBL & Associates Properties, Inc.			14,225,927
327,769		General Growth Properties, Inc.			6,384,940
418,515		Health Care REIT, Inc.			24,169,241
648,600		Highwoods Properties, Inc.			21,157,332
1,533,200		Liberty Property Trust			55,563,168
1,183,385		Macerich Co. (The)(c)			67,725,124
1,847,070		OMEGA Healthcare Investors, Inc.(c)			41,983,901
714,731		ProLogis, Inc.(c)			25,037,027
100,000		Regency Centers Corp.			4,873,000
1,040,500		Retail Properties of America, Inc., Class A			11,778,460
94,219		Simon Property Group, Inc.(c)			14,303,386
789,000		Spirit Realty Capital, Inc.(b)			12,229,500
1,211,534		UDR, Inc.			30,070,274
63,760		Ventas, Inc.(c)			3,969,060
712,120		Verde Realty(b)(d)			9,791,650
					406,238,981
		Total Common Stock
		(cost $797,804,975)			959,426,622
		Preferred Stock - 9.8%
		United States - 9.8%
480,000		BioMed Realty Trust, Inc., Series A			12,134,400
51,000		CBL & Associates Properties, Inc., Series C			1,279,080
100,000		CBL & Associates Properties, Inc., Series D			2,532,000

See previously submitted notes to financial statements for the semi-annual period ended June 30, 2012.

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CBRE Clarion Global Real Estate Income Fund

Portfolio of Investments (unaudited) (concluded)

September 30, 2012

 

Shares						Market Value ($)
	257,339			Cedar Realty Trust, Inc., Series A		$	6,536,410
	171,300			Corporate Office Properties Trust SBI MD, Series J			4,368,150
	320,000			Digital Realty Trust, Inc., Series E			8,560,000
	111,700			Eagle Hospitality Properties Trust, Inc., Series A(b)			576,651
	400,000			Entertainment Properties Trust, Series D			10,028,000
	564,128			Glimcher Realty Trust, Series G			14,182,178
	150,000			iStar Financial, Inc., Series F			2,998,500
	765,000			iStar Financial, Inc., Series I			15,269,400
	520,000			LaSalle Hotel Properties, Series G			13,072,800
	268,000			Pebblebrook Hotel Trust, Series A			7,085,920
	291,217			SL Green Realty Corp., Series C			7,292,074
				Total Preferred Stock
				(cost $103,538,482)			105,915,563
				Total Investments - 98.6%
				(cost $901,343,457)			1,065,342,185
				Other Asset less Liabilities - 1.4%			15,130,135
				Net Assets - 100.0%		$	1,080,472,320

 

*	Includes U.S. Real Estate Investment Trusts (“REIT”) and Real Estate Operating Companies (“REOC”) as well as entities similarly formed under the laws of non-U.S. Countries.

(a)	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the securities amounted to $27,412,165 or 2.5% of net assets.

(b)	Non-income producing security.

(c)	All or a portion of these securities have been physically segregated in connection with written option contracts.

(d)	Fair valued pursuant to guidelines approved by the board.

 

Number of Contracts				Call Options Written (b)		Expiration Date				Exercise Price				Market Value
	3,000			Macerich Co. (The)			October 2012			$	60			$	45,000
	3,000			OMEGA Healthcare Investors, Inc.			October 2012				25				30,000
	500			Simon Property Group, Inc.			October 2012				165				500
	500			Ventas, Inc.			October 2012				65				22,500
	3,500			ProLogis, Inc.			November 2012				36				245,000
				Total Call Options Written
				(Premiums received $1,154,924)										$	343,000

See previously submitted notes to financial statements for the semi-annual period ended June 30, 2012.

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Notes to Portfolio of Investments (unaudited)

(A) Fair Value

GAAP provides guidance on fair value measurements. In accordance with the standard, fair value is defined as the price that the Trust would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. It establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Trust’s investments, and requires additional disclosure about fair value. The hierarchy of inputs is summarized below:

 

•  Level 1		-		unadjusted quoted prices in active markets for identical investments
•  Level 2		-		other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
•  Level 3		-		significant unobservable inputs (including the Trust’s own assumptions in determining the fair value of investments)

For Level 1 inputs, the Trust uses unadjusted quoted prices in active markets for assets or liabilities with sufficient frequency and volume to provide pricing information as the most reliable evidence of fair value.

The Trust’s Level 2 valuation techniques include inputs other than quoted prices within Level 1 that are observable for an asset or liability, either directly or indirectly. Level 2 observable inputs may include quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active in which there are few transactions, the prices are not current, or price quotations vary substantially over time or among market participants. Inputs that are observable for the asset or liability in Level 2 include such factors as interest rates, yield curves, prepayment speeds, credit risk, and default rates for similar liabilities.

For Level 3 valuation techniques, the Trust uses unobservable inputs that reflect assumptions market participants would be expected to use in pricing the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available and are developed based on the best information available under the circumstances. In developing unobservable inputs, market participant assumptions are used if they are reasonably available without undue cost and effort.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used as of September 30, 2012 in valuing the Trust’s investments carried at fair value:

 

		Level 1				Level 2				Level 3				Total
Investments in Real Estate Securities
Common Stocks
Australia		$	154,779,180			$	—			$	—			$	154,779,180
Canada			129,636,376				—				—				129,636,376
France			49,553,740				—				—				49,553,740
Germany			6,206,417				—				—				6,206,417
Hong Kong			42,247,154				—				—				42,247,154
Japan			33,648,252				—				—				33,648,252
Netherlands			30,382,282				—				—				30,382,282
New Zealand			7,668,192				—				—				7,668,192
Singapore			60,404,395				—				—				60,404,395
United Kingdom			38,661,653				—				—				38,661,653
United States			396,447,331				—				9,791,650				406,238,981
Total Common Stocks			949,634,972				—				9,791,650				959,426,622
Preferred Stocks
United States			105,338,912				576,651				—				105,915,563
Total Investments in Real Estate
Securities			1,054,973,884				576,651				9,791,650				1,065,342,185
Call Options Written
United States			(267,500	)			(75,500	)			—				(343,000	)
Total		$	1,054,706,384			$	501,151			$	9,791,650			$	1,064,999,185

See previously submitted notes to financial statements for the annual period ended June 30, 2012.

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Notes to Portfolio of Investments (unaudited) (continued)

 

The primary third party pricing vendor for the Trust’s listed preferred stock investments is FT Interactive Data (“IDC”). When available, the Trust will obtain a closing exchange price to value the preferred stock investments and, in such instances, the investment will be classified as Level 1 since an unadjusted quoted price was utilized. When a closing price is not available for the listed preferred stock investments, IDC will produce an evaluated mean price (midpoint between the bid and the ask evaluation) and such investments will be classified as Level 2 since other observable inputs were used in the valuation. Factors used in the IDC evaluation include trading activity, the presence of a two-sided market, and other relevant market data.

The Trust’s policy is to recognize transfers in and transfers out at the fair value as of the beginning of the period. The portfolio may hold securities which are periodically fair valued in accordance with the Trust’s fair value procedures. This may result in movements between Levels 1, 2 and 3 throughout the period. The fair value of Level 2 and Level 1 investments at December 31, 2011 was $5,065,001 and $969,274,999, respectively. There was no transfer between Level 1 and Level 2 during the reporting period. Pursuant to the Trust’s fair value procedures noted previously, equity securities (including exchange traded securities and open-end regulated investment companies) exchange traded derivatives (i.e. futures contracts and options) are generally categorized as Level 1 securities in the fair value hierarchy. Fixed income securities, non-exchange traded derivatives and money market instruments are generally categorized as Level 2 securities in the fair value hierarchy. Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value as determined in accordance with procedures established by and under the general supervision of the Trustees. These valuations are typically categorized as Level 2 or Level 3 securities in the fair value hierarchy.

The Trust has one investment in a private equity security which is classified as Level 3 because no market quotations are readily available. In determining the fair value of this investment, the following factors may be evaluated: balance sheet, income statement, the portfolio of real estate investments held, economic factors and conditions in which the company operates, and comparable public company valuations and trading prices.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

 

		Common Stocks
Balance as of December 31, 2011		$	10,681,800
Realized gain (loss)			—
Change in unrealized appreciation (depreciation)			(890,150	)
Net purchases (sales)			—
Transfers in and/or out of Level 3			—
Balance as of September 30, 2012		$	9,791,650

For the quarter ended September 30, 2012, there have been no significant changes to the Trust’s fair valuation methodology.

(B) Options

The Fund may purchase or sell (write) options on securities and securities indices which are listed on a national securities exchange or in the over-the-counter (“OTC”) market as a means of achieving additional return or of hedging the value of the Trust’s portfolio.

An option on a security is a contract that gives the holder of the option, in return for a premium, the right to buy from (in the case of a call) or sell to (in the case of a put) the writer of the option the security underlying the option at a specified exercise or “strike” price. The writer of an option on a security has an obligation upon exercise of the option to deliver the underlying security upon payment of the exercise price (in the case of a call) or to pay the exercise price upon delivery of the underlying security (in the case of a put).

 

See previously submitted notes to financial statements for the semi-annual period ended June 30, 2012.

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Notes to Portfolio of Investments (unaudited) (concluded)

 

There are several risks associated with transactions in options on securities. As the writer of a covered call option, the Trust forgoes, during the option’s life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the strike price of the call but has retained the risk of loss should the price of the underlying security decline. The writer of an option has no control over the time when it may be required to fill its obligation as writer of the option. Once an option writer has received an exercise notice, it cannot effect a closing purchase transaction in order to terminate its obligation under the option and must deliver the underlying security at the exercise price.

Transactions in written options during the quarter ended September 30, 2012 were as follows:

 

		Number of Contracts				Premiums Received
Options outstanding, beginning of period			—			$	—
Options closed during the period			(9,499	)			(208,010	)
Options exercised during the period			(1,172	)			(137,436	)
Options expired during the period			(18,748	)			(657,376	)
Options written during the period			39,919				2,157,746
Options outstanding, end of period			10,500			$	1,154,924

 

See previously submitted notes to financial statements for the semi-annual period ended June 30, 2012.

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Item 2.    Controls and Procedures.

 

(a)

The Trust’s principal executive officer and principal financial officer have evaluated the Trust’s disclosure controls and procedures within 90 days of this filing and have concluded that the Trust’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the Trust in this Form N-Q was recorded, processed, summarized, and reported timely.

 

(b)

The Trust’s principal executive officer and principal financial officer are aware of no changes in the Trust’s internal control over financial reporting that occurred during the Trust’s most recent quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Item 3.    Exhibits.

Certification of chief executive officer and chief financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant) CBRE Clarion Global Real Estate Income Fund
By:		/s/    T. Ritson Ferguson
Name:		T. Ritson Ferguson
Title:		President and Chief Executive Officer
Date:		November 16 , 2012

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:		/s/    T. Ritson Ferguson
Name:		T. Ritson Ferguson
Title:		President and Chief Executive Officer
Date:		November 16 , 2012

 

By:		/s/    Jonathan A. Blome
Name:		Jonathan A. Blome
Title:		Chief Financial Officer
Date:		November 16 , 2012