Excerpt from OCBC Investment Research report.

Report Summary

• Stoneweg Europe Stapled Trust (SERT) is a Singapore-listed REIT focusing on European commercial real estate, with a 55% tilt towards logistics and industrial assets and 45% in offices.
• The trust reported 9M25 distributable income of EUR57.6m (down 4.6% YoY), but this surpassed expectations; portfolio occupancy improved to 93.5% and rental reversions were strong at +11.1%.
• Gross revenue and net property income for 9M25 grew slightly YoY, and capital management remains robust with aggregate leverage stable at 43.2% and no significant debt due until 2030 following a green bond issuance.
• The broker raised its fair value estimate for SERT to EUR1.87 and maintains a BUY rating, citing attractive valuation, income resiliency, and potential for long-term growth as Europe’s macro outlook stabilizes.
• SERT’s sponsor, Stoneweg, is focused on value-add opportunities and has aligned interests with unitholders; the trust is not being used as a recycling platform for mature assets.
• ESG initiatives include a net zero operational carbon emission target by 2040 and a large number of green building certificates, despite a recent ESG rating downgrade due to employee benefit concerns.
• Potential catalysts include synergies with the new sponsor and accretive acquisitions; risks include slower European growth and higher redevelopment costs.
• Key financials: FY24 revenue EUR212.9m, NPI margin ~62%, distribution yield ~9%; SERT is trading at a significant discount to NAV.