April saw markets across the globe recover some of the performance lost in the dramatic price movements experienced in March. Pan European real-estate equities were no exception with the benchmark adding 4.2% in the month after -14.4% in March. The Trust’s net asset value (NAV) total return was  better, returning 5.3%. However, the month was volatile with the first half seeing a dramatic continuation of the rally from 27 March (totalling gains of 12% by 17 April) only for markets to weaken through the rest of the month as hopes for a swift resolution in the Middle East faded.

Having reduced gearing dramatically in early-to-mid March we took advantage of the sharp correction in pricing to rebuild some positions (previously sold) in late March and into April. This was then followed by further sales (reducing exposure by 1.5%) by the end of April, such is the market volatility. The major reductions were in the UK (-2.4%), where we see the greatest risk to the economy from the spike in energy costs, alongside growing political risk with a weakened Prime Minister. Sweden also saw reduced exposure (-1.1%) as it remains the home to the most leveraged European property companies and is more susceptible to increased interest costs. On the other side we added to our Swiss property company positions, with all Swiss names traditionally performing better in periods of distress. We continue to try to navigate a careful path through real-estate markets (which are fundamentally sound) and equity markets which are volatile and responding aggressively to geo-political noise, hence the maintenance of some gearing even whilst increasing exposure to safer (lower beta) companies.

At the stock level, the largest additions were to Aedifica (healthcare), Allreal and PSP (both Swiss names) and Merlin (Spanish diversified with a focus on datacentres). This group of names illustrates the strategy of adding to defensive value (Aedifica) alongside more expensive protection (Swiss names) whilst also adding exposure to fundamental long-term growth (Merlin). We continue to remind investors that pan European listed property companies collectively have an average loan-to-value ratio of just 34% and only a handful have any meaningful refinancing due in 2026. In fact, they are in a strong position to take advantage of any market distress from more-leveraged private landlords who may look to exit.

The largest contributors to performance in the month were TAG (German residential), Argan (French logistics) and Covivio (diversified portfolio across offices in Paris and Milan, residential in Paris and Berlin and hotels). Of note is our position in Phoenix Spree Deutschland (PSDL), which announced that the first return of capital (10% of market capitalisation) will be in July. The company has been working steadily towards execution of its winding-up strategy which required a regearing of debt covenants alongside revisions to the (external) management contract ahead of any capital return. Investors have been patient, but they have been right to believe in the board’s promise. The business is strongly underpinned by the simple fact that vacant apartments are worth more than let ones (where rents are regulated and hence sub-market). The stock has already decoupled from other German residential names. Vonovia, the largest residential listed name has returned -6% year-to-date whilst PSDL is up 2% – quite a difference over four months.

In the direct property portfolio, we completed another lease renewal at our industrial estate in Bicester, with the passing rent increasing by 50% on a new 5-year lease. This is the third lease renewal on the estate since purchase, and we have increased the overall annual rent by 25% which is ahead of our underwriting at purchase. We firmly believe that, where there is demand / supply disequilibrium, tenants will be prepared to accept higher market rent. Our experience in our direct portfolio continues to support our conviction that this market remains very supportive for the right assets in the right locations.

	2025/2026	2024/2025	2023/2024	2022/2023	2021/2022
NAV (Inc)	4.4	4.5	16.7	– 19.5	– 14.1
Benchmark	5.0	3.4	14.8	– 20.2	– 18.8
Share Price	2.0	1.3	24.0	– 24.1	– 12.4