Stoneweg Europe Stapled Trust (SERT) FY2025 Financial Results: Analysis and Investor Takeaways

Stoneweg Europe Stapled Trust (SERT), a pan-European logistics and office real estate investment trust (REIT) listed in Singapore, delivered its FY2025 results against a backdrop of improving European economic conditions and positive sector tailwinds. This analysis reviews the key financials, strategic developments, sector trends, and provides actionable insights for investors.

Key Financial Metrics and YoY/QoQ Comparisons

For the full year, SERT’s DPS was 13.390 Euro cents, down 5.1% from FY2024, mainly due to higher interest costs and planned asset divestments. NPI grew 2.5% YoY and 5.0% on a like-for-like basis, with logistics/light industrial sector NPI growing a robust 9.2% YoY.

Historical Performance and Trends

• SERT’s portfolio has grown from €1.3 billion in 2017 to €2.2 billion in 2025, with a significant pivot towards logistics/light industrial assets (now 60% of portfolio vs. 33% in 2020).
• Net gearing has remained below 40% throughout, reflecting prudent capital management.
• Over €400 million in non-core and non-strategic assets have been divested since 2022.
• Occupancy rates remain healthy at 92.6% (portfolio), with logistics/light industrial occupancy at 94.4% and office at 87.2%.

Dividends

The Board declared a 2H 2025 DPS of 6.837 Euro cents, 100% tax exempt, with the full-year DPS at 13.390 Euro cents. This payout is 5.1% lower than FY2024, a direct result of higher finance costs and loss of income from asset sales. The Board expects FY2026 DPS to be “broadly in line” with FY2025, implying a yield of approximately 8.1% at the current security price.

Strategic Developments and Asset Revaluations

• Asset Revaluations: SERT benefited from strong rent reversions (+9.8% in FY2025), particularly in logistics/light industrial and office segments, supporting portfolio valuation gains. The AiOnX data centre investment delivered a substantial 41.1% uplift (€20.5 million) in valuation for FY2025, further strengthening long-term NAV growth.
• Debt Profile: No material debt maturities until 2030, with €800m in green bonds raised in FY2025 and Fitch credit rating upgraded to BBB (stable outlook).
• Divestments and Capital Recycling: SERT sold €140 million of assets at an 11.3% premium to book value, maintaining net gearing at a prudent 38%.
• Share Buybacks: The report notes the impact of a securities buyback program, which had a marginal positive effect on per-share distribution.

Macroeconomic and Market Environment

• The Eurozone economy outperformed expectations in 2025, with GDP growth at 1.5%. Growth is forecast to moderate to 1.1% in 2026, before recovering to 1.6% in 2027.
• European investment volumes are rebounding, with yields beginning to compress as the rate-cut cycle takes effect. Logistics and data centre segments are seeing strong structural tailwinds, including supply constraints and increasing AI/cloud demand.
• SERT’s €50 million investment in AiOnX, Europe’s largest 2GW AI data-centre platform, positions it for long-term NAV growth and exposure to the AI ecosystem.

Chairman’s Statement and Tone

“SERT continues to invest in its highest-conviction sectors—Western Europe logistics and data centres, as strongest long-term growth drivers and in line with our Sponsor’s key strengths. The Manager is evaluating a pipeline of over €70 million of near-term acquisitions, alongside a potential divestment pipeline of a similar quantum targeted for FY2026; the office portfolio remains a key source of capital for disciplined recycling. SERT’s early strategic commitment to AiOnX… is expected to contribute meaningfully to SERT’s long-term NAV growth and portfolio resilience. SERT expects to remain at the upper end of its net-gearing policy range of 35-40%, while continuing to reduce exposure to non-core and non-strategic assets. Barring unforeseen circumstances… the SERT Board currently expects FY2026 DPS to be broadly in line with FY2025 DPS, implying an approximate 8.1% distribution yield at the current SERT security price. While the outlook remains constructive, the Board remains mindful of ongoing macroeconomic and geopolitical tensions that could influence capital markets and investment activity.”

The tone is cautiously optimistic, emphasizing disciplined growth, capital recycling, and income resilience, while acknowledging external uncertainties.

Significant Events and Corporate Actions

• Divestments: €140 million in asset sales at a premium to valuation, and a continued focus on rotating out of non-core office assets.
• Investments: €50 million into the AiOnX data centre platform, securing exposure to rapidly growing AI and cloud infrastructure demand.
• Share Buybacks: Program continued in 2025, supporting per-share metrics.
• Debt Issuance: €800 million in green bonds raised in FY2025, at attractive margins.

Outlook and Guidance

• SERT expects to maintain DPS in FY2026 at levels similar to FY2025, supported by strong logistics and data centre fundamentals.
• The trust will continue to focus on accretive acquisitions, asset enhancements, and selective divestments to drive income and NAV growth.
• Net gearing will be managed within the 35-40% policy range, supporting balance sheet strength and funding flexibility.
• Active pipeline of over €70 million of acquisitions and similar divestment potential for FY2026.

Conclusion and Recommendations

Overall Assessment: SERT’s financial performance and outlook appear robust. The trust has demonstrated prudent capital management, strong rent reversions, and proactive portfolio reshaping towards high-conviction sectors. While DPS was slightly lower YoY due to higher interest costs and divestments, operational performance in logistics and data centres remains strong, and the outlook for distribution stability and yield is attractive.

• If you are currently holding SERT:
  • Consider maintaining your position. The trust is trading at a significant discount to NAV, offers an 8%+ yield, and is well positioned to benefit from European logistics/data centre growth. The Board’s guidance for stable distributions and improving market conditions supports a constructive stance.
• If you do not currently hold SERT:
  • Consider initiating a position. SERT’s current pricing offers exposure to high-quality European logistics and data centre assets at a sizeable NAV discount, with an attractive risk-adjusted yield and clear capital management discipline. Improving market fundamentals and strategic investments in AI/data centres present long-term upside potential.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should conduct their own due diligence or consult a qualified financial advisor before making investment decisions.

View Stoneweg EUTrust EUR Historical chart here