TRADE ALERT - International Portfolio July 2026
We have been looking for a way to increase our exposure to retail real estate.
The reason is simple.
Retail real estate is performing very well today. For years, investors assumed that e-commerce would kill brick-and-mortar retail. But the opposite has happened. Retailers have increasingly realized that the best strategy is not online only, but omnichannel. They need both an online presence and physical stores to maximize sales, improve distribution, lower customer acquisition costs, and strengthen their brands.
Even e-commerce native retailers are increasingly opening physical stores.
At the same time, very little new retail supply has been built over the past decade. Developers focused on apartments, self-storage, industrial, and other sectors, while shopping centers and malls were largely ignored.
As a result, the retail real estate sector is now undersupplied.
Occupancy rates are high. Rent growth is accelerating. Landlords have regained pricing power. And the best malls are becoming increasingly valuable because they are difficult, if not impossible, to replicate.
This has already benefited us.
For example, our biggest mall REIT investment, Macerich (MAC), has recovered strongly from our cost basis of about $8 per share to around $26 today.
But the problem today is that U.S. mall REITs are no longer nearly as cheap as they used to be.
Macerich has rerated materially. Simon is again recognized as a blue-chip mall REIT. And while we still like both businesses, the easy money has already been made.
Therefore, we have been looking abroad for similar opportunities.
That brings us back to IRSA (IRS).
IRSA is Argentina’s largest listed real estate company and, in our view, one of the most attractive ways to gain exposure to high-quality mall real estate today.
We previously owned IRSA shortly after Javier Milei’s presidential victory and more than doubled our money in less than a year. We later sold our position to redeploy capital elsewhere.
Then, in October of last year, we reopened a position after the stock sold off ahead of Argentina’s midterm elections. At the time, the market was worried that Milei would lose political momentum, his reform agenda would stall, and Argentina would slide back into policy gridlock.
Instead, the opposite happened.
Milei’s party performed far better than feared, political risk declined, and the broader reform agenda gained more support.
Since then, the thesis has continued to progress well.
But IRSA’s share price has still lagged the recovery that we have seen in U.S. mall REITs, despite the company continuing to execute well. This creates an opportunity.
Today, we are adding to our existing IRSA position by buying 200 additional shares, increasing our position size by 20%:
