Pan-European real estate equities had a decent September, with the benchmark rising +3.2%. The Trust’s net asset value (NAV) total return was a little better at +3.4%, while the share price rose +6.1% as the discount tightened back to around 7%.
This positive performance also reflected well against the weakness in broad equities (the STOXX Europe 600 Index returned -0.34%). In fact, property equities were the fourth-best performing sector (out of 20) in the STOXX 600 Index over the month. Further evidence of disinflation and softening economic data provided more confidence on the delivery of interest-rate cuts. Market long-term inflation expectations have reduced dramatically over the summer (to 2.1% for eurozone five-year forward inflation), which led long-term bond yields lower.
In turn, this paved the way for property companies to refinance existing debt and fund new acquisitions at interest-rate levels last seen in August 2022. For context, the average bond yield for European companies was 3.5% in September 2024 (Bloomberg Euro-Aggregate REITS Total Return Index), having fallen by 1.6 percentage points over the past 12 months.
In addition, equity raising activity has returned with a vengeance after a quiet couple of years. In September, we supported the raise (SEK 923m) of Cibus, the Nordic supermarket landlord, which is able to acquire at yields above 6% in a fragmented market, while its shares trade above NAV. Also in Scandinavia, we participated in Pandox’s SEK 2bn raise to finance accretive hotel acquisitions outside their core Swedish market. They have acquired hotels in London and Edinburgh.
Investment sentiment for logistics has started to weaken and we continue to be highly selective in that subsector. Vacancy rates across most UK and European markets have increased this year and there is a slowdown in leasing volumes, both on existing portfolios and pre-let on new developments, as occupiers take longer to commit to new space. We tend to back management teams with proven letting and development track records who can add “alpha” by being more agile.
There were two new equity offerings: CTP’s €300m overnight raise to act on new acquisition opportunities and Montea’s €154m rights issue to finance its new Track 27 growth plan, which lifted its 2024-2027 investment goal to €1.2bn from €860m. We participated in the Montea raise.
Segro, the largest Pan-European logistics real estate investment trust, raised equity back in February but had not really deployed the proceeds. In September, it announced an all-share offer for Tritax EuroBox, which will increase Segro’s total portfolio by £1.2bn to £21.9bn, with limited earnings and NAV accretion. Having anticipated a strategic review given general shareholder dissatisfaction (with the gulf between share price and asset value), we acquired shares in EuroBox at an average of 52.9p in the first quarter and exited the bulk of our holding in September at 67p.
Finally, NewRiver announced a cash and share offer for Capital & Regional aggregating an £890m portfolio of UK community shopping centres and retail parks. The combination provides material scope for earnings and dividend accretion. The Trust holds both names and we are positive about the merger benefits.
The end of September marks the Trust’s half year. The NAV total return over the first half was +10.9% while the benchmark returned +9.3%. The share price total return was an encouraging +13.0% over the period.
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 |
