Stoneweg Europe Stapled Trust (SERT) Delivers Strong 1Q 2026 Results, Accelerates Data Centre Growth

Key Highlights and Strategic Developments

• Resilient Portfolio Performance: SERT’s large-scale pan-European logistics and light industrial portfolio, valued at €2.2 billion, continues to generate robust income with strong fundamentals and a clear path for long-term growth. As of 31 March 2026, the portfolio consists of 97 assets spread across major European economies, with logistics/light industrial making up 61% of portfolio value.
• Geographic Diversification: The portfolio is well-diversified, with the Netherlands (29.6%), France (21.3%), Italy (16.4%), and Germany (10.1%) as the key markets. Western Europe and the Nordics account for 90% of the portfolio, providing stability and access to Europe’s strongest markets.
• High Occupancy and Stable Returns: Total portfolio occupancy stands at 92.8% with a weighted average lease expiry (WALE) of 5.0 years. Logistics and light industrial assets report a remarkable 95.1% occupancy and a +7.6% rent reversion in 1Q 2026, underscoring SERT’s operational strength and pricing power.
• Distributions and Yield: SERT declared a 1Q 2026 distribution per stapled security (DPS) of 3.423 Euro cents (5.133 Singapore cents), up 1.5% versus 1Q 2025, with a high current yield of 8.6% based on the prevailing security price (€1.55 vs NAV of €1.99), which is double that of Euro peers and reflects a 22% discount to NAV.
• Active Capital Management: SERT’s net gearing is 42.7%, with 87% of debt hedged or fixed until late 2027, providing strong interest-rate protection and no near-term refinancing risks. The trust has executed €2.1 million in security buybacks year-to-date, supporting EPS and distribution growth.
• ESG Leadership: SERT maintains high ESG scores, including an MSCI ESG “A” rating and top rankings in the ASEAN and Singapore governance indices. The company’s GRESB score improved to 85 points (4 stars), and 52% of leases are now “green” leases with 42 buildings holding top certifications such as BREEAM “Very Good” or LEED “Gold.”

Transformational Data Centre Strategy

• Strategic Shift Toward Data Centres: SERT is targeting a data centre sector allocation of 15–25% of total portfolio value by FY 2028, with a dual-track strategy: (1) repositioning/converting select SERT assets for data centre use, and (2) investing in the sponsor’s AiOnX data centre development fund.
• €50 Million Investment in AiOnX: SERT made an additional €50 million investment via a mandatory convertible loan in AiOnX, earning a 7.25% annual cash coupon (immediately accretive to DPS by +2%) and offering long-term equity upside at a discount to NAV. The initial €50m equity investment in June 2025 has already been revalued 41% higher as development milestones were achieved, highlighting significant upside.
• Pipeline and Execution: AiOnX, controlled by sponsor SWI Group, has five major data centre projects across Europe (Dublin, Madrid, Varde, Milan, Cambridge), totalling 2.2 GW of secured power capacity and a potential gross development value exceeding €30 billion. The first phase (16MW in Dublin) will commence rent income from a major US hyperscaler in late 2026. SWI Group’s acquisition of Polarise, an NVIDIA-preferred cloud partner, further strengthens the AI infrastructure ecosystem and execution capability.
• Repositioning SERT Assets: At least 10 SERT sites in four countries have been identified for potential data centre conversion. Flagship projects, such as Parc Des Docks in Paris, are progressing through planning with positive feedback and interest from hyperscale tenants. SERT continues to earn rental income during the conversion process, and valuation uplift is expected as approvals are secured.

Active Portfolio and Asset Management

• Improved Like-for-Like Performance: On a like-for-like basis, 1Q 2026 net property income (NPI) grew 2.3% overall, with logistics/light industrial up 3.7% and offices slightly down 1%. Total distributable income rose 0.4% and DPS was up 1.5% versus the prior year.
• Leasing Momentum: Approximately 37,000 sqm of new leases were secured in 1Q 2026, with average rent reversions of +7.6% in logistics/light industrial. Key highlights include significant lease renewals and new leases in the Netherlands, Denmark, and France, with rent reversions up to +53% in select deals.
• Tenant Diversification: SERT’s tenant base is highly diversified, with no tenant contributing more than 4% of income and the top 10 making up only 21.2% of rent. Nearly 90% of tenants are large multinationals or government entities, providing income resilience.
• Utility Cost Pass-through: SERT’s leases are structured to pass through nearly all utility cost inflation to tenants. Historic energy shocks (e.g., Russia-Ukraine, current Iran volatility) have had negligible impact, with SERT-borne utility costs consistently below 0.5% of total property expenses.
• Non-Core Asset Recycling: SERT continues to divest non-core office and underperforming assets, recycling proceeds into higher-yielding logistics and data centre investments. Recent acquisitions include a €35 million modern logistics facility in the Netherlands at a 6.0% NOI yield, well above SERT’s cost of debt.

Financial Performance and Capital Management

• Balance Sheet Strength: As of 31 March 2026, SERT reported €46.8 million in cash, €2.2 billion in investment property value, and €120.5 million invested in financial assets (primarily AiOnX). The adjusted NAV per stapled security is €1.96, and the EPRA NRV is €2.14.
• No Near-Term Refinancing Risks: SERT’s debt maturity is well-staggered with 87% interest exposure hedged/fixed, and no major refinancing due before late 2027. The average interest rate for 1Q 2026 was 3.84%, up slightly from 3.66% in 1Q 2025.
• Distribution Sustainability: SERT’s DPS is now stabilised following a reset, with FY 2026 DPS expected to be broadly in line with FY 2025 (13.39 Euro cents/security), supported by higher-yielding reinvestments and €41 million of realised capital gains available for future flexibility.

Market Outlook and Guidance

• Favourable Market Dynamics: Logistics and data centre fundamentals remain robust. Green Street projects 3.2% p.a. rental growth in logistics through 2030, and the European AI market is forecast to reach €190 billion by 2030, fueling demand for data centre capacity. SERT’s strategic positioning in these sectors is expected to drive both DPS and NAV growth over the medium term.
• Potential Price Sensitive Developments:
  • The acceleration of SERT’s data centre allocation to 15–25% of the portfolio, especially via AiOnX, could significantly rerate SERT’s NAV and yield profile as milestone developments are realised.
  • The immediate accretion to DPS from the AiOnX convertible loan and continued asset recycling into higher yields is supportive of distributable income growth.
  • Progress on asset conversions and securing major tenants (such as US hyperscalers) could be catalysts for value uplift and share price appreciation.
  • The current 22% discount to NAV and one of the highest dividend yields among European and SGX-listed peers provide potential for share price re-rating as the market reassesses SERT’s growth prospects.

Conclusion

The 1Q 2026 update from Stoneweg Europe Stapled Trust signals a major strategic inflection, with the portfolio’s logistics backbone delivering resilient returns and the data centre strategy offering material upside. SERT’s robust capital management, high dividend yield, and discounted valuation present a compelling investment case, especially as data centre platform milestones are achieved and portfolio quality is further enhanced.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult with professional advisors before making any investment decision. The value of investments may go up as well as down, and past performance is not indicative of future results. The information provided is based on the latest available data from Stoneweg Europe Stapled Trust’s 1Q 2026 business update and is subject to change.

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