The positive performance of pan European real estate equities continued from April into May, with the benchmark returning 2.8% and the Trust’s net asset value (NAV) outperforming with a return of 3.4%. The icing on the proverbial cake was the share price return of 5.7%, as investors began to appreciate that not only is the sector cheap (both on discount to NAV and earnings yields) but that one can gain access through TR Property with an additional 9% discount to NAV. Our new financial year began on 1 April and to the end of May the benchmark return is 10.5%, the NAV is up 11.2%, and the share price has generated a total return of 13.8%.
The outstanding sector in the month was European shopping-centres, with Unibail outperforming (+17.4%) and recovering from April’s concerns about its US portfolio (and the impact of tariffs on the US consumer). We are overweight Unibail but also have large positions in Eurocommercial (+7.7%) and Klepierre (+6.9%) which both performed well ahead of the wider market. In the UK, Hammerson (+12.0%) responded to the news that it had recycled some of the proceeds from the sale of Value Retail (outlet malls) into buying the portion of Brent Cross which it didn’t already own. Shaftesbury Capital (+8.3%) continued to enjoy a positive run with more news about the redeployment of proceeds from the sale of 25% of its Covent Garden estate to long term shareholder, Norges (Norway’s state pension fund).
Within the German residential space, our performance was mixed. We owned both the best performer, TAG (+7.0%), and the worst, Phoenix Spree Deutschland (-3.8%). Inverse correlation with Bund yields remains very high and the longer-end of the curve drifted higher over the month. While elevated global geopolitical risk continued to hold up the risk-free rate, it is important to note that corporate bond spreads continue to narrow, which is an encouraging sign.
Industrial names also provided a broad spread of returns. The UK remains in the grip of a wave of M&A activity. The acceptance by the board of Urban Logistics Reit (+9.8%) of a cash and paper bid from LondonMetric, equating to a discount of 3% to the last published NAV continued to drive the stock higher, helped by its link to the LondonMetric (+6.4%) share price. The stock also goes ex-dividend on 5 June. The worst performer in this group was Warehouse Reit (-6.9%) where Blackstone withdrew its offer of 119p (including dividend) following a due diligence review particularly relating to Radway Green, the large development site outside Crewe. Just after the month-end, the board of Warehouse Reit announced acceptance of a revised bid of 109p (ex-dividend). This is a long way from the September 2024 independent valuation of 127p and highlights the difficulty in valuing development land. Caution should be the watchword on assets with so few comparables. European logistics developers, VGP and Montea both returned +7.9% as investors got behind the potential for more Asian businesses storing and manufacturing in Europe. Companies have sought to shorten their supply chains and the threat of tariffs has compounded concerns about global trade, adding to investors’ expectations of this trend continuing.
Healthcare remains a sector ‘de jour’ with the boards of the two large Belgium-domiciled REITs, Aedifica (+0.0%) and Cofinimmo (+16.5%) approving their merger following an adjustment to the merger ratio (Aedifica effectively improving its offer by 2.5%). This is a classic case of the more lowly-valued, poorer-quality business benefiting from the more highly-rated bidder’s paper. We have a quality bias and owned Aedifica rather than Cofinimmo. Looking over a slightly longer period, Aedifica’s share price has risen 18% in the year to date, while Cofinimmo has soared 36%. In the UK, the bidding war for Assura (+2.6%) continued, with PHP (-1.8%) waiting to see if KKR will improve on their cash offer which has currently been superseded by PHP’s mix of cash and shares bid.
Our London office stock selection had a very poor month. Our only exposure is Workspace (-6.2%) which delivered a profit warning two weeks ahead of its annual results. The new CEO will need to reassure investors with his strategic review on 5 June. GPE (+10.8%) published decent results alongside a string of lettings announcements and the share price now reflects events, in our view.
The Trust’s results for the year to March will be published on 10 June and this will include the final dividend.
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 |
