October 2025

Pan European real-estate equities returned 1.8% in GBP (1.2% in EUR) underperforming wider European equities (STOXX 600 2.6%). The Trust had a poor month on a relative basis, returning 1.2%, 60 basis points (bps) below the benchmark return.

It was an eventful month with a very wide dispersion of returns ranging from Big Yellow (14.4%), which announced that it had mandated an investment bank to consider various approaches for the business, through to Unite (-21.1%) which announced a profit warning whilst in the midst of buying Empiric Student (EPS). I’ve written in previous monthlies that we didn’t see the merits of the ESP transaction and sold 50% of our overweight position in Unite at an average 850p in May/June. The stock corrected to 720p by the end of September and then fell a further 21% on the profit warning, finishing October at 567p. There are a large number of questions for the board (and managers) of Unite focusing on how their management systems failed to flag the slowdown in take up in the crucial few weeks before the start of the academic year. We also question why you would agree to buy a business a few weeks ahead of these crucial data points whilst underwriting the deal with a pessimistic occupancy assumption. In 25 years of equity fund management I have rarely seen such an example of corporate self-immolation. We await the outcome of the board’s internal inquiry which surely must be underway.

October saw a raft of Q3 reporting. In summary we continue to see positive releasing of value and like-for-like growth. Some companies are seeing bottom-line growth pegged back by more expensive debt refinancings (as cheaper debt vintages roll off). Hammerson’s guidance cut by 1% is a good example of this, following an early bond refinancing. Highlights include Sirius, which saw 5.2% like-for-like growth in its German and UK industrial/workspace assets. Shopping centre owners, Klepierre, Mercialys and Eurocommercial, all reported solid growth amidst improving retail-sales figures. London Metric (4.6%) and one of our largest overweights also reported 5.2% annualised like-for-like growth with a solid 98% occupancy.

Saba, a US activist fund well known for taking large positions in UK investment trusts, has widened its focus to include REITs, announcing a 10% holding in Workspace (5.4%). This certainly helped the share price performance at the time, but it has weakened again in October. The company’s management is making valuable and concerted efforts to address the myriad of issues left by the previous CEO, including making overdue disposals alongside operation platform improvements and appointing a new CFO.

UK property companies (2.9%) outperformed Continental European ones (0.7% in EUR) as investors drew comfort from the government’s PR machine, which has been consistently briefing that the Chancellor will endeavour to be bond-market friendly with the budget on 26 November. The 10-year gilt yield dropped from 4.7% to 4.4% in the month, driving the positive response in UK real-estate equities, particularly larger companies (which remain the ‘go-to’ for investors seeking to quickly gain exposure). The Trust’s UK exposure is underweight to both Segro (6.4%) and Landsec (6.8%) the two largest UK names. These two underweights contributed the most to the relative underperformance in the month, whilst our largest overweights such as TEG (-2.1%) and Picton (-0.5%) also detracted.

However, it is worth noting that they have both previously been strong contributors in the first half of the financial year.

Interim results and the interim dividend will be published on 28 November. There is also an Investor Meets Company presentation on 17 November where we will be updating shareholders on recent performance and our thoughts on the outlook.

	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