A poor month for pan-European REITs with the EPRA benchmark returning -3.2% whilst the STOXX 600 returned 0.5%. The net asset value (NAV) total return for the Trust was -3.6% and the share price discount widened slightly delivering a share price total return of -4.0%.
The start of the month was dominated by the announcement of an agreed cash and paper deal from Prologis for Segro. We now understand that the board of Segro rebuffed an earlier approach in 2024. In hindsight their tactical error was to not concentrate resources (and hiring more expertise) into the development of the datacentre portfolio once the board realised that a global player (ten times its size) had clearly spotted an opportunity buried in its asset base. The UK’s largest REIT accounted for 24% of the market cap of the UK REIT sector and post the deal the UK will be c. 2.5% of global REITS, just ahead of Canada (2.1%).
Tritax Big Box (-6.3%) took advantage of the perceived liquidity flow which may come back from investors not willing / able to hold Prologis paper and raised £350m to fund their datacentre pipeline which now extends to four additional sites beyond Manor Farm, Slough. The market waits for news of the identity of the tenant at this first project. We participated in this raise which was at a 4% discount to the previous close.
Our best performer was Irish Residential Properties (2.3%) which reported 5.8% earnings-per-share growth, backed by 2.1% like-for-like rent growth and confirmed a positive outlook for further margin improvement with potential acquisitions. The ability for new lettings to be completed at market rents will continue to drive earnings in the standing portfolio.
German residential continued to be under pressure throughout the month as Bund yields rose steadily in response to geo-political risk and inflationary concerns. Transaction volumes remain low and this is compounded by the almost total reluctance of large listed landlords to allow genuine price discovery through sales. Shareholders are fully aware that the valuers’ approach of ‘mark to model’ rather than mark to market produces grossly elevated asset values. The clear opportunity to drive shareholder returns through the use of property disposal proceeds for buybacks is completely ignored as this would reveal the real value of the portfolios. Our overweight positions are to TEG (where over 25% of its assets are in Poland) and Phoenix Spree Deutschland which is in a multi-year runoff. Vonovia remains the largest underweight position in the portfolio.
Self storage was a poor performer as all three listed names, Big Yellow, Safestore and Shurgard all confirmed tough trading conditions with slowing housing transactions and increased supply particularly in London and the South East. The Trust has overweight positions in BYG and SAFE which have been reduced and no holding in Shurgard which fell -9.9% in the month. The investment rationale for owning the best-in-class storage assets remains but in the short term earnings headwinds will persist.
Whilst the sector has underperformed wider equity markets in 2026, we remain positive given market fundamentals and rising demand /prices for best in class assets. Very encouragingly we can continue to report strong debt availability with numerous examples on bond issuance over the traditionally quieter holiday period. Klepierre issued a €500 eight-year green bond at 3.875% coupon. CTP managed a three-year €500m green bond at 3.625% whilst Castellum also raised €300m for a three year tenure at 3.75%.
Listed property companies remain very conservatively financed with much long-duration debt and little near-term refinancing. There are pockets of weak demand (self storage, non-prime Paris offices) but the equity market has moved promptly to reprice these equities. The self-storage names have fallen between -12% and -19% year to date. Gecina, the largest office owner in Paris has returned -8.7% year to date. Meanwhile our European shopping centre group (Klepierre, Unibail and Eurocommercial have returned between 12% and 18% year to date.
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 31.08.2026
| 2025/2026 | 2024/2025 | 2023/2024 | 2022/2023 | 2021/2022 | |
| NAV (Inc) | 1.0 | – 0.1 | 22.3 | – 13.3 | – 23.3 |
| Benchmark | 2.5 | – 1.1 | 20.3 | – 14.2 | – 27.6 |
| Share Price | 0.0 | 0.6 | 23.2 | – 16.7 | – 24.2 |
