Quite the most extraordinary month for all asset classes, with pan European real-estate equities being no exception to the market volatility. The sector has begun to attract interest given its defensive characteristics in a ‘tariff-challenged environment’. More on that later, but firstly the monthly statistics.
Our benchmark hit an intra-month low on 9 April of -5.8%, but this was followed by a sustained rally of over 14% (with just two out of 15 trading days in negative territory) in the remainder of the month. This resulted in a very positive monthly return of 7.5% in line with the Trust’s net asset value (NAV) increase of (+7.5%). Investors have begun to appreciate that: (1) a global slowdown is inevitable given the disruption to consumer and corporate behaviour from the unknowable consequences of US government policy; (2) real estate is relatively immune from these short-term fluctuations given its longer-duration lease obligations; and (3) the cost of short- and longer-term financing is likely to fall as growth slows – a positive for a leveraged asset class such as real estate.
Given these historically outsized swings in performance, the wide differential at the stock level was to be expected. Only one company, Unibail, has meaningful direct exposure to the US, which accounts for around 20% of its assets. The stock was the worst performer in the month, returning -4.3% on concerns around the US consumer and the margin squeeze retailers are likely to face. European shopping centre names fared slightly better, but the sub-sector was a collective underperformer with Klepierre (4.3%) and Eurocommercial (1.6%) lagging the rise of the broader market. Meanwhile, long duration ‘bond proxies’ such as German residential stocks were the runaway winners in the month. Vonovia, Europe’s largest and most liquid property company, offers generalist investors the quickest route to sector exposure and so little surprise that it fared well, returning 16.8%. This was followed by smaller names LEG (13.9%) and TAG (13.3%). Other residential property companies (read ‘defensive in an economic slowdown’) also performed well with Irish Residential Properties Reit returning 8.4%, Finland’s Kojamo adding 19.5% and Sweden’s Balder rising 10.1%.
Returns from UK holdings were mixed, with those names touched by M&A activity continuing to perform. Assura (5.1%) and PHP (9.2%) continued to travel with hope (certainly among long-term real-estate equity investors like ourselves) that a merger, rather than a privatisation, is an option that the board and shareholders will get the chance to consider. Urban Logistics Reit, more commonly referred to by its ticker ‘SHED’, returned 12.0% as the board announced it would look favourably on a deal if London Metric came forward with a formal offer on the cash-and-paper terms it has outlined.
With the expectation of a global slowdown, economically insensitive sectors saw further support. Social Housing Reit (15.7%) had the additional tailwind of new management highlighting their expectation of rotating a non-performing tenant. Student accommodation is also viewed as defensive and Unite (8.8%), Europe’s largest listed player, performed well. Supermarkets also did well and while Supermarket Income Reit had a quiet April (3.3%), after a busy and productive March (8.3%) with the internalisation of its management contract, it was the turn of our Nordic supermarket owner, Cibus (11.9%) to excel.
The weakest performer in the UK was CLS Holdings, the highly-leveraged owner of offices in the UK, France and Germany. The stock fell 7.9% after announcing a cut in its dividend as management seeks to reduce leverage. The other regional office focused property company, Regional Reit, had already repaired its balance sheet through a deeply discounted rights issue at 10p (versus an IPO price of 100p in 2016). Having taken the proverbial ‘pain’ in late 2024, the stock enjoyed a strong April (10.0%) rebounding from all-time lows in March.
Picton, our largest microcap position returned 6.0% in the month, bringing its total return in the year to date to +20.2%, as investors begin to appreciate the baked-in accretion from buying back shares at 25-30% discounts to net asset value. With a conservative loan-to-value of 25%, the board has plenty of firepower to maintain the buyback.
The Trust will publish its full year (to 31 March 2025) results alongside the announcement of its final dividend on Friday 6 June.
Discrete rolling annual performance (%)
Performance data is in GBP £ terms. Investors should be aware that past performance should not be considered a guide to future performance. All fund performance data is net of all fees and expenses.
As at date 30.06.2026
| 2025/2026 | 2024/2025 | 2023/2024 | 2022/2023 | 2021/2022 | |
| NAV (Inc) | – 0.5 | 11.6 | 22.5 | – 19.3 | – 16.5 |
| Benchmark | – 0.1 | 9.7 | 21.4 | – 19.8 | – 21.5 |
| Share Price | – 2.0 | 13.8 | 22.5 | – 24.5 | – 13.5 |
