<PAGE> 1
Templeton Global
Real Estate Fund
Your Fund'S Objective:
The Templeton Global Real Estate Fund seeks long-term capital growth by
investing primarily in securities of domestic and foreign companies which are
principally engaged in or related to the real estate industry, or which own
significant real estate assets. Current income is a secondary objective.
April 15, 1997
Dear Shareholder:
We are pleased to bring you the semi-annual report of the Templeton Global Real
Estate Fund for the six months ended February 28, 1997. Unlike periods when the
real estate sector experienced declining property values and falling rents due
to excessive supply, this was a favorable period for most real estate markets.
Within this environment, the Fund's Class I shares posted a six-month cumulative
total return of 14.44%, as discussed in the Performance Summary on page 5,
outperforming its benchmark, the Morgan Stanley Capital International(R) (MSCI)
World Index, which delivered a total return of 11.43% for the same period.(1)
(1). The MSCI World Index includes approximately 1,500 companies representing
the stock markets of 22 countries, including the U.S., Germany, Canada,
Australia, New Zealand, and Japan. The index is not managed according to any
investment strategy, includes no sales charges or management expenses, and does
not contain cash (the Fund generally carries a certain percentage of cash at any
given time). Of course, one cannot invest directly in an index, and the index is
not representative of the Fund's portfolio. Total return includes reinvested
dividends.
1
<PAGE> 2
Templeton Global Real Estate Fund
Geographic Distribution on 2/28/97
Based on Total Net Assets
[Pie Chart]
United States Stocks 54.5%
Asian Stocks 16.3%
European Stocks 14.9%
Canadian Stocks 4.6%
Australian &
New Zealand Stocks 3.0%
Latin American Stocks 2.2%
Middle East &
African Stocks 1.2%
Short-Term Obligations &
Other Net Assets 3.3%
During 1996, U.S. real estate investment trusts (REITs) significantly
outperformed the Standard & Poor's 500(R) Stock Index (S&P 500(R))(2). Seeking
to profit from this booming market, we decreased our U.S. exposure from 62.4% of
total net assets on August 31, 1996, to 54.5% at the end of the reporting
period. Although we reduced our domestic position, we continued to maintain a
favorable outlook for Rouse Co., a non-REIT with strong growth potential, whose
stock performed well during the six-month period. Rouse purchased the Hughes
Estate in 1995, making it one of the largest landowners in the Las Vegas
metropolitan area. In our view, Rouse enjoys a competitive advantage because it
usually keeps approximately 65% of its cash flow for its business, versus most
REITs, which keep only about 20% of cash flow for reinvestment into the
business. This allows Rouse to reinvest its cash flow into its existing assets
more easily than a typical REIT can do, given somewhat limiting REIT tax
restrictions.
Some experts believe that the urban populations of China, Indonesia, Thailand,
Malaysia, Singapore, Hong Kong, and the Philippines will rise 88% in the next 15
years. Based on their expectations, we increased our Asian exposure from 14.6%
of total net assets to 16.3% during the reporting period. For example, we
purchased shares of PT Jaya Properties, Indonesia's premier real estate
developer. The company had an enormous amount of land available for development
in Asia, and a strong presence in the low to middle income housing market, the
fastest-growing real estate segment in Jakarta. Jaya's avoidance of less
profitable sectors of the property market, such as
2. The REIT industry's performance is measured by the Equity Real Estate
Investment Trust Index. The S&P 500 consists of 500 widely held U.S. common
stocks within four sectors (industrials, utilities, financial, and
transportation). Both indices are unmanaged and their performance includes
reinvested dividends. One cannot invest directly in an index. Past performance
is not predictive of future results.
2
<PAGE> 3
Templeton Global Real Estate Fund
Portfolio Breakdown on 2/28/97
Based on Total Net Assets
[Pie Chart]
Real Estate 61.5%
Services 6.6%
Capital Equipment 6.4%
Multi-Industry 6.2%
Energy 5.9%
Materials 5.8%
Finance 4.3%
Short-Term Obligations &
Other Net Assets 3.3%
condominiums, office buildings and golf courses, also made its stock attractive.
In Europe, where we increased our exposure from 13.7% of total net assets on
August 31, 1996, to 14.9% at the end of the reporting period, we found the most
investment opportunities in France. We augmented our holdings of Union du Credit
Bail Immobilier Unibail (Unibail), France's premier real estate company, which
owns some of the most desirable office properties in Paris. Between 1989 and
1994, supply and demand became unbalanced as a result of overbuilding in the
French capital. However, available office space has diminished recently and
liquidity has returned to the market. In our opinion, Unibail is the real estate
company best positioned to benefit from increased investor interest in Paris
property.
Looking forward, we expect to see more real estate companies listed on global
stock exchanges, and are optimistic about the growth potential for many of these
firms. Asian stock markets already have meaningful weightings of real estate
equities, and the U.S. stock market's weighting of this type of security is
increasing.
Templeton Global Real Estate Fund
Top 10 Equity Holdings on 2/28/97
Based on Total Net Assets
<TABLE>
<CAPTION>
% of Total
Company, Industry, Country Net Assets
<S> <C>
Revenue Property Ltd.
Real Estate, Canada 3.6%
PT Jaya Properties, fgn.
Real Estate, Indonesia 3.5%
Rouse Co.
Real Estate, U.S. 3.0%
Equity Residential Properties
Real Estate, U.S. 2.9%
Weeks Corp.
Real Estate, U.S. 2.9%
Catellus Development Corp.
Real Estate, U.S. 2.9%
Security Capital Pacific Trust, SBI
Real Estate, U.S. 2.7%
LTC Properties Inc.
Real Estate, U.S. 2.6%
CBL & Associates Properties Inc.
Real Estate, U.S. 2.6%
Cheung Kong Holdings Ltd.
Multi-Industry, Hong Kong 2.5%
</TABLE>
For a complete list of portfolio holdings, please see page 11 of this report.
3
<PAGE> 4
We anticipate that European markets will follow suit over time, but differing
tax laws and historical ownership structures add a level of complexity that
indicates change will not occur as quickly as it has in the U.S.
This discussion reflects the strategies we employed for the Fund during the six
months under review, and includes our opinions as of the close of the period.
Since economic and market conditions are constantly changing, our strategies,
and our evaluations, conclusions and decisions regarding portfolio holdings may
change as new circumstances arise. Although past performance of a specific
investment or sector cannot guarantee future performance, such information can
be useful in analyzing securities we purchase or sell for the Fund.
It should be remembered, however, that there are special risks involved with
global investing related to market, currency, economic, social, political, and
other factors. Emerging markets involve similar but heightened risks, in
addition to risks associated with the relatively small size and lesser liquidity
of these markets. Since the Fund concentrates on the real estate industry, its
share price may be more volatile than those of more broadly diversified
investments. These special risks and other considerations are discussed in the
Fund's prospectus.
We appreciate your participation in the Templeton Global Real Estate Fund and
welcome any comments or suggestions you may have.
Sincerely,
/s/ Jeffrey A. Everett
- ---------------------------------
Jeffrey A. Everett, CFA
Portfolio Manager
Templeton Global Real Estate Fund
Celebrating 50 Years
This year marks 50 years of business for Franklin Templeton. Over these years,
we have experienced profound changes in technology, regulations and customer
expectations within the mutual fund industry. As one of the largest mutual fund
families, we're proud to be an innovative industry leader, providing people like
you with an opportunity to invest in companies and governments around the globe.
In addition, we want to stress that all securities markets move both up and
down. Mixed in with the good years can be some bad years. Accordingly, mutual
fund share prices also move up and down. Every investor should expect such
fluctuations, which can be wide. When markets are going down, as well as up, we
encourage investors to maintain a long-term perspective. We thank you for your
past support and look forward to serving your investment needs in the years
ahead.
4
<PAGE> 5
PERFORMANCE SUMMARY
CLASS I
The Templeton Global Real Estate Fund Class I produced a cumulative total return
of 14.44% for the six-month period ended February 28, 1997. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
dividends and capital gains distributions, and does not include the initial
sales charge. While we expect market volatility in the short term, we always
maintain a long-term perspective when managing the Fund, and we encourage
shareholders to view their investments in a similar manner. As you can see from
the table to the right, the Fund delivered a cumulative total return of more
than 94% since inception on September 12, 1989.
The price of the Fund's shares, as measured by net asset value, increased $1.53,
from $13.78 on August 31, 1996, to $15.31 on February 28, 1997. During this
time, shareholders received 42 cents ($0.42) per share in dividend income. Of
course, past performance is not predictive of future results, and dividends will
vary depending on income earned by the Fund, and any
profits realized from the sale of securities in the portfolio.
TEMPLETON GLOBAL REAL ESTATE FUND
CLASS I
Periods Ended 2/28/97
<TABLE>
<CAPTION>
Since
Inception
One-Year Five-Year (9/12/89)
<S> <C> <C> <C>
Cumulative
Total Return(1) 18.66% 62.13% 94.32%
Average Annual
Total Return(2) 11.84% 8.86% 8.45%
Value of $10,000
Investment(3) $11,184 $15,288 $18,315
</TABLE>
<TABLE>
<CAPTION>
2/28/93 2/28/94 2/28/95 2/29/96 2/28/97
<S> <C> <C> <C> <C> <C>
One-Year
Total Return(4) 9.35% 27.17% -12.10% 11.79% 18.66%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods, and does not include the initial sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods, and includes the maximum 5.75% initial
sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the specified periods, and include the maximum 5.75% initial sales
charge.
4. One-year total return represents the change in value of an investment over
the one-year periods ended on the specified dates, and does not include the
sales charge.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Prior to July 1, 1992, Class I shares were offered at a higher initial
sales charge. Thus, actual total return to purchasers of shares during that
period would have been lower than noted above. On January 1, 1993, the Fund
implemented a Rule 12b-1 plan, which affects subsequent performance. Investment
return and principal value will fluctuate with market conditions, currencies and
the economic and political climates of countries where investments are made.
Emerging markets involve heightened risks related to the same factors, in
addition to those associated with the relatively small size and lesser liquidity
of these markets. You may have a gain or loss when you sell your shares. Past
performance is not predictive of future results.
5
<PAGE> 6
PERFORMANCE SUMMARY
CLASS II
The Templeton Global Real Estate Fund Class II provided a cumulative total
return of 14.08% for the six-month period ended February 28, 1997. Cumulative
total return measures the change in value of an investment, assuming
reinvestment of dividends and capital gains distributions, and does not include
sales charges.
The price of the Fund's shares, as measured by net asset value, increased $1.55,
from $13.67 on August 31, 1996, to $15.22 on February 28, 1997. During this
time, shareholders received 34.3 cents ($0.343) per share in dividend income. Of
course, past performance is not predictive of future results, and dividends will
vary depending on income earned by the Fund, and any profits realized from the
sale of securities in the portfolio.
TEMPLETON REAL ESTATE FUND
CLASS II
Periods Ended 2/28/97
<TABLE>
<CAPTION>
Since
Inception
One-Year (5/1/95)
<S> <C> <C>
Cumulative Total Return(1) 17.87% 30.85%
Average Annual Total Return(2) 15.73% 15.20%
Value of $10,000 Investment(3) $11,573 $12,958
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the indicated periods, and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the indicated periods. It includes the 1.0% initial sales
charge and the 1.0% contingent deferred sales charge, applicable to shares
redeemed within the first 18 months of investment.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the specified periods, and include all sales charges.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Investment return and principal value will fluctuate with market
conditions, currencies and the economic and political climates of countries
where investments are made. Emerging markets involve heightened risks related to
the same factors, in addition to those associated with the relatively small size
and lesser liquidity of these markets. You may have a gain or loss when you sell
your shares. Past performance is not predictive of future results.
6
<PAGE> 7
Many investors have asked us about the activities of Sir John Templeton, since
his retirement from the funds. We asked Professor Robert Herrmann to update us
on Sir John's current activities and his comments follow.
THE NEW CAREER OF
SIR JOHN TEMPLETON
[PHOTO OF SIR JOHN TEMPLETON]
By Professor
Robert Herrmann
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently, he devotes all of his time and efforts to the
John Templeton Foundation. A major portion of his assets remain invested in
Templeton funds, managed by many of the investment professionals he selected and
trained. For sentimental reasons, he allows his name to be associated with the
funds, although he knows no more about their management and holdings than any
other investor.
Sir John Templeton established the Templeton Foundation in 1987, to foster the
acquisition of spiritual information through scientific research. Working with
scientists, theologians and others, he strives toward a new science that uses
empirical and statistical scientific methods to discover and test spiritual
knowledge. A crucial ingredient in his research is what Sir John calls "humility
theology," an attitude of humility toward the Creator, combined with
receptiveness to the theological significance of current scientific discoveries.
Universal spiritual laws, or "laws of life," are among the areas of
investigation. In his recent book, Worldwide Laws of Life, Sir John compiles 200
laws and proverbs from nearly all religions, and deeply embedded in human
history. For example, the Golden Rule taught by Jesus in the Sermon on the
Mount, states "Do unto others as you would have others do unto you," and is
affirmed by all major religions as an acceptable, universal law of life. Other
books which Sir John has authored or co-authored during the past few years
include: The Humble Approach, Is God the Only Reality, Evidence of Purpose,
Who's Who in Theology and Science and The God Who Would Be Known.
With an annual budget of more than $30 million, the Templeton Foundation
sponsors 60 programs focusing on spiritual progress and the benefits of freedom.
Sir John's first sizable investment in the programs was the Templeton Prize for
Progress in Religion. A panel of nine judges gives the annual award which now
exceeds $1.2 million to individuals who have shown extraordinary originality in
furthering the world's understanding of God or spirituality.
Recipients of the prize include Professor Paul Davies, author of The Mind of
God; the Right Honorable Lord Jacobovits, former Chief Rabbi of Great Britain
and The Commonwealth; the Reverend Dr. Billy Graham, world-renowned preacher and
presidential inauguration speaker; Mr. Nikkyo Nimano, founder of the World
Conference on Religion and Peace; and Sir Sarepalli Radhakrishnan, former
President of India, and Oxford professor of Eastern Religions and Ethics.
To encourage young people's and their parents' appreciation of spiritual laws of
life, Sir John established an essay contest for teenagers in his home county of
Franklin, Tennessee. Students submit essays about the spiritual life principles
they plan to follow, and prizes are offered semiannually. In 1996, more than 800
youth participated. Twenty-six similar programs
7
<PAGE> 8
have been launched in various locations, with the support of generous local
donors.
The Foundation also sponsors a worldwide program that awards college-level
faculty who teach courses integrating science and religion. During the program's
first two years, more than 200 courses were created. The Foundation maintains an
extensive program of research and education on the health benefits of
spirituality, including prizes for medical schools providing courses on
spirituality in medicine. Lastly, the Foundation publishes a newsletter with
over 2,000 subscribers. Free subscriptions are available to Templeton
shareholders by writing to the Foundation.
To contact Sir John Templeton or receive the free newsletter subscription,
please write to:
The John Templeton Foundation
2 Radnor Corporate Center #320
100 Matsonford Road
Radnor, PA 19087
8
<PAGE> 9
TEMPLETON GLOBAL REAL ESTATE FUND
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE--CLASS I
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 1997 -------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
----------------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.78 $ 13.20 $ 13.66 $ 12.66 $ 10.40 $ 10.08
-------- -------- -------- -------- ------- -------
Income from investment operations:
Net investment income .18 .31 .39 .22 .25 .37
Net realized and unrealized gain (loss) 1.77 .64 (.64) 1.00 2.36 .43
-------- -------- -------- -------- ------- -------
Total from investment operations 1.95 .95 (.25) 1.22 2.61 .80
-------- -------- -------- -------- ------- -------
Distributions to shareholders from net
investment income (.42) (.37) (.21) (.22) (.35) (.48)
-------- -------- -------- -------- ------- -------
Change in net asset value 1.53 .58 (.46) 1.00 2.26 .32
-------- -------- -------- -------- ------- -------
Net asset value, end of period $ 15.31 $ 13.78 $ 13.20 $ 13.66 $ 12.66 $ 10.40
======== ======== ======== ======== ======= =======
TOTAL RETURN* 14.44% 7.48% (1.74)% 9.69% 25.94% 8.29%
RATIOS /SUPPLEMENTAL DATA
Net assets, end of period (000) $ 146,077 $125,875 $130,149 $131,544 $61,820 $36,955
Ratio of expenses to average net
assets 1.50%** 1.51% 1.55% 1.58% 1.68% 1.69%
Ratio of net investment income to
average net assets 2.51%** 2.73% 3.05% 1.97% 2.60% 3.64%
Portfolio turnover rate 13.06% 20.07% 38.69% 32.34% 19.74% 32.35%
Average commission rate paid (per share) $ .0068 $ .0418
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS. NOT ANNUALIZED FOR PERIODS
OF LESS THAN ONE YEAR.
** ANNUALIZED.
9
<PAGE> 10
TEMPLETON GLOBAL REAL ESTATE FUND
Financial Highlights (cont.)
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE--CLASS II
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS FOR THE PERIOD
ENDED MAY 1, 1995+
FEBRUARY 28, 1997 YEAR ENDED THROUGH
(UNAUDITED) AUGUST 31, 1996 AUGUST 31, 1995
----------------- --------------- ---------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 13.67 $ 13.17 $ 12.25
-------- --------------- -------
Income from investment operations:
Net investment income .16 .33 .03
Net realized and unrealized gain 1.73 .52 .89
-------- --------------- -------
Total from investment operations 1.89 .85 .92
-------- --------------- -------
Distributions to shareholders from net investment income (.34) (.35) --
-------- --------------- -------
Change in net asset value 1.55 .50 .92
-------- --------------- -------
Net asset value, end of period $ 15.22 $ 13.67 $ 13.17
================== ================ ================
TOTAL RETURN* 14.08% 6.69% 7.51%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $ 8,249 $ 5,275 $ 1,823
Ratio of expenses to average net assets 2.24%** 2.26% 2.26%**
Ratio of net investment income to average net assets 1.58%** 2.20% 1.71%**
Portfolio turnover rate 13.06% 20.07% 38.69%
Average commission rate paid (per share) $ .0068 $ .0418 --
</TABLE>
* TOTAL RETURN DOES NOT REFLECT SALES COMMISSIONS OR THE CONTINGENT DEFERRED
SALES CHARGE. NOT ANNUALIZED FOR PERIODS OF LESS THAN ONE YEAR.
** ANNUALIZED.
+ COMMENCEMENT OF SALES.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
TEMPLETON GLOBAL REAL ESTATE FUND
Investment Portfolio, February 28, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCKS: 93.3%
- ---------------------------------------------------------------------------------------------------------------------
BANKING: 1.9%
Banque Nationale de Paris Fr. 30,000 $ 1,361,721
HSBC Holdings PLC H.K. 55,612 1,357,319
PT Bank Bali, fgn. Indo. 9,500 25,360
PT Lippo Bank, fgn. Indo. 12,500 14,599
Shinhan Bank Co. Ltd. Kor. 6,880 103,573
------------
2,862,572
- ---------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS & COMPONENTS: 2.1%
Byucksan Development Co. Ltd. Kor. 89,629 1,036,335
*Suez Cement Co. Egy. 88,000 1,887,882
Unione Cementi Marchino Emiliane (Unicem), di Risp Itl. 139,580 368,352
------------
3,292,569
- ---------------------------------------------------------------------------------------------------------------------
BUSINESS & PUBLIC SERVICES: 0.9%
+ Horizon Group Inc. U.S. 107,520 1,411,200
- ---------------------------------------------------------------------------------------------------------------------
CONSTRUCTION & HOUSING: 6.1%
Daito Trust Construction Co. Ltd. Jpn. 81,100 793,318
Dragados y Construcciones SA Sp. 50,000 756,915
Engle Homes U.S. 147,500 1,456,562
Kaufman & Broad Home Corp. U.S. 150,000 2,118,750
*Schuler Homes Inc. U.S. 160,900 925,175
Sirti SPA Itl. 180,000 1,108,273
*++ Sundance Homes Inc. U.S. 690,000 1,811,250
Toda Corp. Jpn. 70,000 402,139
------------
9,372,382
- ---------------------------------------------------------------------------------------------------------------------
ELECTRICAL & ELECTRONICS: 0.3%
Philips Electronics NV Neth. 9,200 415,428
- ---------------------------------------------------------------------------------------------------------------------
ENERGY SOURCES: 1.9%
Societe Elf Aquitane SA Fr. 10,317 987,316
Valero Energy Corp. U.S. 60,700 1,912,050
------------
2,899,366
- ---------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: 1.4%
Federal National Mortgage Assn. U.S. 52,000 2,080,000
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 12
TEMPLETON GLOBAL REAL ESTATE FUND
Investment Portfolio, February 28, 1997 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------------------------------------------
FOREST PRODUCTS & PAPER: 3.0%
*Asia Pacific Resources International, A Indo. 23,900 119,500
Fletcher Challenge Ltd. Forestry Division, ADR N.Z. 12,769 173,978
Georgia-Pacific Corp. U.S. 20,000 $ 1,560,000
*Mayr-Melnhof Karton AG Aust. 25,000 1,280,162
St. Joe Paper Corp. U.S. 20,000 1,552,500
------------
4,686,140
- ---------------------------------------------------------------------------------------------------------------------
LEISURE & TOURISM: 2.2%
*Danubius Hotel and Spa RT Hun. 60,000 1,916,840
Grand Hotel Holdings Ltd. H.K. 2,469,000 1,107,968
Oriental Hotel (Thailand) Public Co. Ltd., fgn. Thai. 76,200 353,118
------------
3,377,926
- ---------------------------------------------------------------------------------------------------------------------
MERCHANDISING: 0.6%
*Wessel & Vett AS, C Den. 12,000 867,416
- ---------------------------------------------------------------------------------------------------------------------
METALS & MINING: 0.7%
Boehler Uddeholm AG Aust. 9,500 656,483
Boehler Uddeholm AG, 144A Aust. 2,000 138,207
British Steel PLC U.K. 59,000 144,624
RGC Ltd. Aus. 33,601 133,629
Rustenburg Platinum Holdings Ltd Ord ZAR.10 S.AF. 1,200 20,355
------------
1,093,298
- ---------------------------------------------------------------------------------------------------------------------
MULTI-INDUSTRY: 5.6%
Cheung Kong Holdings Ltd. H.K. 400,000 3,822,462
Inversiones y Representacion Arg. 202,831 738,630
Metro Pacific Corp. MDI Phil. 2,718,539 805,294
*Security Capital US Realty Lux. 232,000 3,248,000
Swire Pacific Ltd., B H.K. 43,800 59,673
------------
8,674,059
- ---------------------------------------------------------------------------------------------------------------------
REAL ESTATE: 60.7%
+ American Health Properties Inc. U.S. 64,300 1,647,687
Bail Investissement Fr. 8,700 1,292,397
Beacon Properties Corp U.S. 105,000 3,740,625
*++ Bluegreen Corp. U.S. 1,192,945 3,280,599
*++ Canlan Investment Corp. Can. 595,600 1,633,930
Carramerica Realty Corp. U.S. 65,000 1,974,375
Catellus Development Corp. U.S. 290,000 4,458,750
+ CBL & Associates Properties Inc. U.S. 160,000 3,980,000
+ Charles E. Smith Residential Realty Inc. U.S. 80,000 2,260,000
*China Resources Beijing Land Ltd., 144A Chn. 480,300 272,908
+ Crescent Real Estate Equities Company U.S. 33,000 1,806,750
+ Equity Residential Properties U.S. 100,000 4,525,000
+ Federal Realty Investment Trust U.S. 33,000 886,875
</TABLE>
12
<PAGE> 13
TEMPLETON GLOBAL REAL ESTATE FUND
Investment Portfolio, February 28, 1997 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------------------------------------------
REAL ESTATE (cont.)
+ General Growth Properties U.S. 104,000 $ 3,185,000
+ Health Care Property Investors Inc. U.S. 30,000 1,023,750
+ Highwood Properties Inc., REIT U.S. 96,200 3,318,900
Inversiones y Representacion, GDR Arg. 500 18,062
+ LTC Properties Inc. U.S. 226,000 3,983,250
+ Nationwide Health Properties Inc. U.S. 122,000 2,684,000
New Asia Realty and Trust Co. Ltd., A H.K. 388,000 1,410,463
New World Development Co. Ltd. H.K. 458,553 2,842,381
*New World Infrastructure Ltd. H.K. 757 2,248
+ Omega Healthcare Investors U.S. 57,184 1,794,139
Parkway Holdings Ltd. Sing. 209,000 879,691
+ Post Properties Inc. U.S. 67,000 2,537,625
PT Jaya Properties, fgn. Indo. 3,820,500 5,457,857
Revenue Property Ltd. Can. 2,294,739 4,297,547
Rouse Co. U.S. 156,300 4,571,775
Ryoden Development Ltd. H.K. 3,650,000 1,048,756
+ Security Capital Industrial Trust U.S. 93,808 2,063,776
+ Security Capital Pacific Trust, SBI U.S. 179,111 4,209,109
+ Summit Properties Inc., REIT U.S. 91,300 1,848,825
Sun Hung Kai Properties Ltd. H.K. 130,000 1,502,512
Taylor Woodrow PLC U.K. 311,177 975,643
Union du Credit Bail Immobilier Unibail Fr. 26,850 2,578,920
*Union Valley Corp. U.S. 1,255 13
+ United Dominion Realty Trust, Inc. U.S. 162,495 2,437,425
+ Weeks Corp. U.S. 135,000 4,522,500
+ Weingarten Realty Investors, SBI U.S. 31,100 1,333,413
Westfield Trust Units Aus. 754,285 1,453,004
------------
93,740,480
- ---------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: 0.5%
Telecomunicacoes Brasileiras SA, ADR, 144A Braz. 490 47,530
Telmex-Telefonos de Mexico SA, L, ADR Mex. 20,000 777,500
------------
825,030
- ---------------------------------------------------------------------------------------------------------------------
TRANSPORTATION: 1.4%
Florida East Coast Industries Inc. U.S. 11,000 1,073,875
Peninsular & Oriental Steam Navigation Co. U.K. 100,000 1,086,372
------------
2,160,247
- ---------------------------------------------------------------------------------------------------------------------
UTILITIES ELECTRICAL & GAS: 4.0%
Korea Electric Power Corp. Kor. 59,750 1,715,046
Mosenergo, ADR, 144A Russ. 33,000 1,377,750
</TABLE>
13
<PAGE> 14
TEMPLETON GLOBAL REAL ESTATE FUND
Investment Portfolio, February 28, 1997 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------------------------------------------
UTILITIES ELECTRICAL & GAS (cont.)
Mosenergo, ADR, Reg. S Russ. 18,873 $ 787,948
National Grid Holdings PLC U.K. 234,200 791,513
National Power PLC U.K. 192,378 1,532,206
------------
6,204,463
------------
TOTAL COMMON STOCKS (cost $117,036,338) 143,962,576
- ---------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS: 1.7%
- ---------------------------------------------------------------------------------------------------------------------
Baumax AG, pfd. Aust. 28,650 859,005
Lojas Americanas SA, pfd. Braz. 22,658,436 325,524
Nacional Financiera SA, 11.25%, conv., pfd. Mex. 15,700 631,925
Telebras-Telecomunicacoes Brasileiras SA, pfd., ADR Braz. 8,000 776,000
------------
TOTAL PREFERRED STOCKS (cost $2,973,984) 2,592,454
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL IN
LOCAL CURRENCY**
- ---------------------------------------------------------------------------------------------------------------------
BONDS: 1.7%
- ---------------------------------------------------------------------------------------------------------------------
Italy Govt., 5.00%, 6/28/01, conv. Itl. 1,345,000 1,341,637
Metro Pacific Capital, 2.50%, 4/11/03, conv., 144A Phil. 65,000 76,050
Revenue Property, 6.00%, conv., 3/01/04 Can. 1,400,000 1,204,000
------------
TOTAL BONDS (cost $2,826,773) 2,621,687
- ---------------------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 3.6% (cost $5,655,749)
- ---------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bills, 4.84% to 5.06%, with
maturities to 5/29/97 U.S. 5,700,000 5,657,703
- ---------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 100.3% (cost $128,492,844) 154,834,420
OTHER ASSETS, LESS LIABILITIES: (0.3%) (508,514)
------------
TOTAL NET ASSETS: 100.0% $154,325,906
============
</TABLE>
* NON-INCOME PRODUCING.
** CURRENCY OF COUNTRIES INDICATED.
+ REAL ESTATE INVESTMENT TRUST (33.3% OF TOTAL NET ASSETS).
++ SEE NOTE 5.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 15
TEMPLETON GLOBAL REAL ESTATE FUND
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1997
(unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value
(identified cost $128,492,844) $154,834,420
Cash 58,946
Receivables:
Investment securities sold 54,911
Fund shares sold 504,900
Dividends and interest 314,700
------------
Total assets 155,767,877
------------
Liabilities:
Payables:
Investment securities purchased 634,083
Fund shares redeemed 526,395
Accrued expenses 281,493
------------
Total liabilities 1,441,971
------------
Net assets, at value $154,325,906
============
Net assets consist of:
Distributions in excess of net
investment income $ (88,862)
Net unrealized appreciation 26,341,576
Accumulated net realized loss (4,770,346)
Net capital paid in on shares of
beneficial interest 132,843,538
------------
Net assets, at value $154,325,906
============
Class I
Net asset value per share
($146,076,743 / 9,538,638
shares outstanding) $ 15.31
============
Maximum offering price
($15.31 / 94.25%) $ 16.24
============
Class II
Net asset value per share
($8,249,163 / 542,140
shares outstanding) $ 15.22
============
Maximum offering price
($15.22 / 99.00%) $ 15.37
============
</TABLE>
STATEMENT OF OPERATIONS
for the six months ended February 28, 1997 (unaudited)
<TABLE>
<S> <C> <C>
Investment income:
(net of $33,060
foreign taxes withheld)
Dividends $ 2,655,038
Interest 179,018
-----------
Total income $ 2,834,056
Expenses:
Management fees (Note 3) 532,356
Administrative fees (Note
3) 106,473
Distribution fees (Note 3)
Class I 168,827
Class II 32,869
Transfer agent fees (Note
3) 108,000
Custodian fees 33,000
Reports to shareholders 56,000
Audit fees 9,000
Legal fees 3,500
Registration and filing
fees 27,000
Trustees' fees and
expenses 6,500
Other 2,684
-----------
Total expenses 1,086,209
-----------
Net investment income 1,747,847
Realized and unrealized gain (loss):
Net realized gain (loss)
on:
Investments 1,352,450
Foreign currency
transactions (22,424)
-----------
1,330,026
Net unrealized
appreciation
on investments 15,988,757
-----------
Net realized and
unrealized gain 17,318,783
-----------
Net increase in net assets
resulting from operations $19,066,630
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 16
TEMPLETON GLOBAL REAL ESTATE FUND
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, 1997 YEAR ENDED
(UNAUDITED) AUGUST 31, 1996
----------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 1,747,847 $ 3,484,842
Net realized gain (loss) on investment and foreign currency transactions 1,330,026 (3,766,931)
Net unrealized appreciation 15,988,757 9,465,131
------------ ------------
Net increase in net assets resulting from operations 19,066,630 9,183,042
Distributions to shareholders
from net investment income
Class I (3,879,764) (3,656,308)
Class II (147,230) (58,680)
Fund share transactions (Note 2)
Class I 5,855,591 (9,558,558)
Class II 2,280,995 3,267,549
------------ ------------
Net increase (decrease) in net assets 23,176,222 (822,955)
Net assets:
Beginning of period 131,149,684 131,972,639
------------ ------------
End of period $ 154,325,906 $ 131,149,684
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 17
TEMPLETON GLOBAL REAL ESTATE FUND
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Global Real Estate Fund (the Fund) is a Massachusetts business trust
and an open-end, diversified management investment company registered under the
Investment Company Act of 1940. The Fund seeks long-term capital growth by
investing primarily in securities of domestic and foreign companies which are
principally engaged in or related to the real estate industry or which own
significant real estate assets. The following summarizes the Fund's significant
accounting policies.
A. SECURITIES VALUATIONS:
Securities listed or traded on a recognized national or foreign exchange or
NASDAQ are valued at the last reported sales prices on the principal exchange on
which the securities are traded. Over-the-counter securities and listed
securities for which no sale is reported are valued at the mean between the last
current bid and asked prices. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by
management and approved by the Board of Trustees.
B. FOREIGN CURRENCY TRANSACTIONS:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign currencies
are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customarily
enters into a foreign exchange contract to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the amounts
of dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities other than investments in securities at the end of the
fiscal period, resulting from changes in the exchange rates.
C. INCOME TAXES:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all its
taxable income to its shareholders. Therefore, no provision has been made for
income taxes.
D. SECURITIES TRANSACTIONS, INVESTMENT INCOME, DISTRIBUTIONS AND EXPENSES:
Security transactions are accounted for on a trade date basis. Dividend income
is recorded on the ex-dividend date. Certain dividend income on foreign
securities is recorded as soon as information is available to the Fund. Interest
income and estimated expenses are accrued daily. Distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date.
E. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
17
<PAGE> 18
TEMPLETON GLOBAL REAL ESTATE FUND
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
2. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
The Fund offers two classes of shares: Class I shares and Class II shares.
Shares of each class are identical except for their initial sales load, a
contingent deferred sales charge on Class II shares, distribution fees, and
voting rights on matters affecting a single class. At February 28, 1997, there
were an unlimited number of shares of beneficial interest authorized ($0.01 par
value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
CLASS I
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,206,205 $ 17,737,456 1,668,000 $ 22,151,692
Shares issued on reinvestment of
distributions 232,791 3,282,613 243,797 3,114,773
Shares redeemed (1,033,164) (15,164,478) (2,640,108) (34,825,023)
---------- ------------ ---------- ------------
Net increase (decrease) 405,832 $ 5,855,591 (728,311) $ (9,558,558)
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
CLASS II
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 169,076 $ 2,476,898 282,857 $ 3,739,556
Shares issued on reinvestment of
distributions 9,139 128,318 4,365 55,597
Shares redeemed (21,941) (324,221) (39,852) (527,604)
---------- ------------ ---------- ------------
Net increase 156,274 $ 2,280,995 247,370 $ 3,267,549
========== ============ ========== ============
</TABLE>
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton Global
Advisors Ltd. (TGAL), Franklin Templeton Services, Inc. (FTSI), Franklin
Templeton Distributors, Inc. (FTD), and Franklin Templeton Investor Services,
Inc. (FTIS), the Fund's investment manager, administrative manager, principal
underwriter, and transfer agent, respectively.
The Fund pays monthly an investment management fee to TGAL equal, on an annual
basis, to 0.75% of the average daily net assets of the Fund. The Fund pays FTSI
monthly a fee of 0.15% per annum on the first $200 million of the Fund's average
daily net assets, 0.135% of the next $500 million, 0.10% of the next $500
million, and 0.075% per annum of such average net assets in excess of $1.2
billion. For the six months ended February 28, 1997, FTD received net
commissions of $5,724 from the sale of the Funds shares and FTIS received fees
of $108,000.
Under the distribution plans for Class I and Class II shares, the Fund
reimburses FTD quarterly for FTD's costs and expenses in connection with any
activity that is primarily intended to result in a sale of Fund shares, subject
to a maximum of 0.25% and 1.00% per annum of the average daily net assets of
Class I and Class II shares, respectively. Under the Class I distribution plan,
costs and expenses exceeding the maximum may be reimbursed in subsequent
periods. At February 28, 1997, unreimbursed expenses amount to $51,429. Class II
shares redeemed within 18 months are subject to a contingent deferred sales
charge. Contingent deferred sales charges of $13,293 were paid to FTD for the
six months ended February 28, 1997.
18
<PAGE> 19
TEMPLETON GLOBAL REAL ESTATE FUND
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
An officer of the Fund is a partner of Dechert Price & Rhoads, legal counsel for
the Fund, which firm received fees for the six months ended February 28, 1997.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the six
months ended February 28, 1997 aggregated $21,799,221 and $17,995,133,
respectively. The cost of securities for federal income tax purposes is
$128,639,144. Realized gains and losses are reported on an identified cost
basis.
At February 28, 1997, the aggregate gross unrealized appreciation and
depreciation of portfolio securities, based on cost for federal income tax
purposes, was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $35,484,935
Unrealized depreciation (9,289,659)
------------
Net unrealized appreciation $26,195,276
============
</TABLE>
5. HOLDING OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
The Investment Company Act of 1940 defines "affiliated companies" as Investments
in portfolio companies in which the Fund owns 5% or more of the outstanding
voting securities. Investments in "affiliated companies" at February 28, 1997
amounted to $6,725,779.
6. CAPITAL LOSS CARRYFORWARD
At August 31, 1996 the Fund had tax basis capital losses of $7,000,000 which may
be carried over to offset future capital gains. Of this amount, $1,000,000 arose
from the merger with National Real Estate Fund on December 14, 1990. Such losses
expire in varying amounts from August 31, 1997 to August 31, 2004.
19
<PAGE> 20
FRANKLIN TEMPLETON GROUP OF FUNDS
LITERATURE REQUEST - Call 1-800/DIAL BEN (1-800/342-5236) today for a free
descriptive brochure and
prospectus on any of the funds listed below. The prospectus contains more
complete information, including
fees, charges and expenses, and should be read carefully before investing or
sending money.
GLOBAL GROWTH INCOME FRANKLIN STATE-SPECIFIC
FUNDS SEEKING
Franklin Global Health Care Fund Franklin Adjustable Rate
TAX-FREE INCOME
Securities Fund
Franklin Templeton Japan Fund
Franklin Adjustable U.S.
Alabama
Templeton Developing Markets Trust
Government Securities Fund
Arizona*
Templeton Foreign Fund
Franklin's AGE High Income Fund
Arkansas**
Templeton Foreign Smaller
Franklin Investment
Companies Fund California*
Grade Income Fund
Templeton Global Infrastructure Fund
Colorado
Franklin Short-Intermediate U.S.
Templeton Global
Government Securities Fund
Connecticut
Opportunities Trust
Franklin U.S. Government
Florida*
Templeton Global Real Estate Fund
Securities Fund
Georgia
Templeton Global Smaller
Franklin Money Fund
Companies Fund Hawaii**
Franklin Federal Money Fund
Templeton Greater European Fund Indiana
Templeton Growth Fund Kentucky
FOR NON-U.S. INVESTORS:
Templeton Latin America Fund Louisiana
Franklin Tax-Advantaged
High Yield Securities Fund
Templeton Pacific Growth Fund Maryland
Franklin Tax-Advantaged
Templeton World Fund Massachusetts***
International Bond Fund
Michigan*
Franklin Tax-Advantaged U.S.
GLOBAL GROWTH AND INCOME
Minnesota***
Government Securities Fund
Franklin Global Utilities Fund
Missouri
FOR CORPORATIONS:
Franklin Templeton German
New Jersey
Franklin Corporate Qualified
Government Bond Fund
New York*
Dividend Fund
Franklin Templeton
North Carolina
Global Currency Fund
Ohio***
Mutual European Fund
FRANKLIN FUNDS SEEKING
Oregon
Templeton Global Bond Fund
TAX-FREE INCOME
Pennsylvania
Templeton Growth and Income Fund
Federal Intermediate-Term
Tennessee**
Tax-Free Income Fund
Texas
GLOBAL INCOME Federal Tax-Free Income Fund
Virginia
High Yield Tax-Free Income Fund
Franklin Global Government
Income Fund
Washington**
Insured Tax-Free Income Fund
Franklin Templeton Hard
Puerto Rico Tax-Free Income Fund
VARIABLE ANNUITIES+
Currency Fund
Tax-Exempt Money Fund
Franklin Valuemark(R)
Franklin Templeton High
Income Currency Fund
Franklin Templeton
Valuemark Income Plus
Templeton Americas
(an immediate annuity)
Government Securities Fund
*TWO OR MORE FUND OPTIONS AVAILABLE: LONG-TERM PORTFOLIO, INTERMEDIATE-TERM
PORTFOLIO, A PORTFOLIO OF INSURED MUNICIPAL SECURITIES,
AND/OR A HIGH YIELD PORTFOLIO (CA) AND A MONEY MARKET PORTFOLIO (CA AND NY).
**THE FUND MAY INVEST UP TO 100% OF ITS ASSETS IN BONDS THAT PAY INTEREST
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX.
***PORTFOLIO OF INSURED MUNICIPAL SECURITIES.
+FRANKLIN VALUEMARK AND FRANKLIN TEMPLETON VALUEMARK INCOME PLUS ARE ISSUED BY
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA OR BY ITS WHOLLY OWNED
SUBSIDIARY, PREFERRED LIFE INSURANCE COMPANY OF NEW YORK, AND DISTRIBUTED BY
NALAC FINANCIAL PLANS, LLC.
FGF 02/97 GROWTH
Franklin Blue Chip Fund
Franklin California Growth Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin MidCap Growth Fund
Franklin Small Cap Growth Fund
Mutual Discovery Fund
GROWTH AND INCOME
Franklin Asset Allocation Fund
Franklin Balance Sheet
Investment Fund
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin MicroCap Value Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Rising Dividends Fund
Franklin Strategic Income Fund
Franklin Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Shares Fund
Templeton American Trust, Inc.
FUND ALLOCATOR SERIES:
Franklin Templeton
Conservative Target Fund
Franklin Templeton
Moderate Target Fund
Franklin Templeton
Growth Target Fund
<PAGE> 21
Templeton Global
Real Estate Fund
Principal Underwriter:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Shareholder Services
1-800-632-2301
Fund Information
1-800-342-5236
This report must be preceded or accompanied by the current prospectus of the
Templeton Global Real Estate Fund, which contains more complete information
including charges and expenses.
Like any investment in securities, the value of the Fund's portfolio will be
subject to the risk of loss from market, currency, economic, political, and
other factors, as well as investment decisions by the investment manager which
will not always be profitable or wise. The Fund and its investors are not
protected from such losses by the investment manager. Therefore, investors who
cannot accept this risk should not invest in shares of the Fund.
To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded, and accessed. These calls can be
determined by the presence of a regular beeping tone.
[GRAPHIC]
TEMPLETON
GLOBAL
REAL ESTATE
FUND
Semi-Annual Report
February 28, 1997
[FRANKLIN TEMPLETON LOGO]
