June was a poor month for pan-European real estate equities, with both the net asset value (NAV) and the benchmark down by -4.0%, underperforming the broader STOXX Europe 600 (-1.1%). The European Central Bank’s interest-rate cut had been well flagged, but the certainty did not appear to make any impact. Our sense is that the narrative around the cut, which hinted towards slowing momentum rather than the acceleration of cuts, has had the desired dampening effect on expectations. Politics was a major driver of returns following the surprise announcement of a French general election, which weighed heavily on all French names – particularly the largest ones. Collectively, EPRA France fell -9.5% over the month. The first round of voting has calmed markets given that the far right (Rassemblement National) did not receive as many votes as expected. However, the best case now is a hung parliament if the centre and left-wing parties coordinate for the second round of votes on 7 July. The offices names Icade (-19.4%) and Gecina (-13.2%) were the hardest hit. Carmila (-12.0%) and Mercialys (-11.2%), with 100% French shopping-centre portfolios, were harder hit than Klépierre (-6.1%) and Unibail (-8.9%), which have significant non-French portfolios. Our largest relative overweight in France is the industrial/logistics investor and developer Argan. The stock fell -6.2%, ending the month at €73 per share below the price (€74), where it raised €150m during April.
The Riksbank in Sweden also cut rates (from 4% to 3.75%), and this helped the Swedish 10 yr drop 23 basis points to 2.23%. This helped Sweden to outperform the rest of Europe, falling just -0.9% (in Swedish krona (SEK) terms) over the month. It was no surprise that the best performers in Sweden were the most rate-sensitive names such as Balder (+2.8%) and Cibus (+3.0%). The latter is now back at a premium to NAV and is likely to raise capital and buy more supermarkets to support the dividend profile. Atrium Ljungberg (+2.5%) sold SEK2.1bn of assets in Sundbyberg to Alecta and marked an exit from that submarket. The cash receipts will ensure completion of the development pipeline, and the market took this news positively.
In the UK (-1.8%), there was a broad spread of performance from Safestore (-14.5%) to EuroBox (+14.3%). The former responded poorly to like-for-like negative revenue growth of -0.3% and the confirmation that fiscal-year earnings per share (EPS) would be in the lower half of analysts’ expectations. Meanwhile, EuroBox responded well to the market rumour that Brookfield were running the slide rule over the business. Post month-end, the board confirmed that they had received a number of bids from Brookfield, as well as receiving requests for access to the dataroom from other parties. This sent the stock up a further 10% to 66p. Having sold our entire position in 2022 (average 110p), we repurchased in February and March this year (average 52.8p) as investor frustration boiled to the surface. New River Retail (+7.7%) also did well, responding to the news that it had extended the ‘put up or shut up‘ (PUSU) with Capital & Regional until 18 July. Workspace (+11.0%) published fiscal-year results and, while it showed further NAV falls (-9.5%), the earnings beat estimates; more importantly, management were optimistic given the capital recycling and control of debt costs. The new CEO (currently CEO of Capital & Regional) is not scheduled to arrive until the fourth quarter of 2025, unless Capital & Regional is sold. We remain hopeful that New River will make a bid that the board are minded to recommend. Landsec (-3.2%) reported its fiscal-year results, which included the £400m sale of the non-core hotel portfolio. It also announced the acquisition of a further 17.5% stake in Bluewater for £120m, bringing ownership up to 66%. It continues to seek to increase exposure to dominant shopping centres. The price reflected a yield of 8.5% and is 1% accretive to EPS. We believe adding to existing dominant malls at these price levels is a positive.
The AGM will take place at the RAC, 89/91 Pall Mall, London SW1Y 5HS on 18 July at 2.30pm. All shareholders are welcome. The event will also be screened live via InvestorMeetsCompany.
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 |
