A positive start to 2026 with the Trust’s net asset value (NAV) total return (in sterling) rising 3.4% and the benchmark (in sterling) returning 2.8%. Even so this strong performance was almost matched by wider European equities with the Euro Stoxx 600 (in euros) also returning 3.2%. 

It was a busy month for listed real estate companies, particularly in the UK where we saw no less than three announcements of CEO changes. Two were a total surprise and one was widely anticipated. The latter was Derwent London where Paul Williams announced his retirement after seven years as CEO and an impressive 38 years at the company. In the case of British Land, the CEO for the last five years Simon Carter, is moving on to run a large private-equity backed European logistics property business. Possibly reflecting his belief that logistics will outperform prime London offices over the next cycle? The greatest surprise of all was the replacement of the CEO at Workspace after just one year in post. We felt that Lawrence Hutchings took over a business with significant operational challenges, set against a highly competitive backdrop for flexible workspace across the capital and that he was making good progress in driving efficiencies and reducing leverage through sales. He had plenty of turnaround experience, having nursed Capital & Regional from the intensive care ward to its takeover by New River Retail. Clearly the board wanted more. The irony for market observers is that the listed real estate sector has traditionally been seen as a ‘feather bed’ for C-suites with low turnover and underperforming managers rarely replaced except when the businesses were destined for equity annihilation (e.g. Intu) or where shareholders voted with their feet for change through privatisation (e.g. Warehouse Reit) or merger (e.g. Industrial Logistics Reit, Life Science Reit). So when we see a CEO working hard and making those difficult (and often unpopular) decisions to improve efficiency with the results beginning to appear, it’s a definite headscratcher when they are replaced.

The UK was a strong regional performer (5.4%) and the Trust’s UK holdings were the largest source of outperformance in the month. Picton Property (12%) responded well to the announcement of a strategic review. The company has well-run portfolio with low leverage (and fixed-price debt) which has merely suffered from being a small cap (market capitalisation of £420m). With an NAV per share of c.100p and a month-end share price of just 83p we expect that discount to close further as the outcome of the strategic review becomes clearer. The holding is 4.3% of our assets and the second-largest relative overweight position. Other contributors in the UK were London Metric (5.4%), Primary Health Properties (7.7%) and Tritax Bigbox (8.6%). However, we didn’t own the best performing segment of the market, London Offices where GPE (previously known as Great Portland Estates) returned a stunning 17.4%. Its larger competitor, Derwent London rose 10.5%. There was little new news, since we have been aware for many months that the ultra-prime office market was seeing strong rental growth but it is a just a small part of the overall market and geographically focused around the best-in-class transport links (Elizabeth Line and railway interchanges).

Swiss stocks were collectively strong in January (7.1% in Swiss francs), continuing a theme of the second half of 2025, where investors sought out the traditional safe havens (in response to geo-political turmoil) including gold and Swiss franc based assets. Swiss property companies are priced to perfection but that didn’t stop investors from pushing prices in January to new highs. The two largest Swiss property companies, Swiss Prime Site and PSP Swiss account for over 10% of our assets.

Another strong sector performance was pan-European healthcare (8.4% in sterling) driven particularly by Aedifica (9.9%) and Cofinimmo (10.6%) which both rose in response to the regulatory sign off on their merger. Primary Health Properties (7.7%) also rallied as it begins to bed in the takeover of Assura.

Full-year 2025 result announcements begin in earnest in early February and we remain positive about companies reporting top line growth having benefited from both rent indexation and market growth in 2025.

	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