Stoneweg Europe Stapled Trust (SERT) has reported a distribution per stapled security (DPS) of 6.553 Euro cents (9.8 cents) for the 1HFY2025 ended June 30, 7% lower y-o-y.
Gross revenue rose by 1.1% y-o-y to EUR107.4 million while net property income (NPI) was up by 2.2% y-o-y to EUR66.9 million. The higher figures were attributed to income from the redeveloped Nervesa21 and Via dell'Industria 18. The higher NPI was also due to the reversal of historical doubtful debt provisions after tenant-customers settled outstanding payments, as well as higher income from annual inflation indexation and positive rent reversion on new leases across the portfolio.
The increases were partly offset by the absence of a EUR1.2 million one-off reinstatement income recognised in 1HFY2024 in Via Brigata Padova 19, as well as the underperformance of SERT’s Polish portfolio and Moeder Teresalaan 100 / 200 Utrecht in the Netherlands due to lower occupancy. The trust also registered loss of income from asset divestments.
According to its Aug 13 statement, the trust saw strong like-for-like growth in the logistics and light industrial sector.
On a like-for-like basis, portfolio NPI was up by 4.9% y-o-y with gains across all sectors.
Distributable income fell by 7.3% y-o-y to EUR36.7 million mainly due to a 23.9% increase in net interest costs. The higher costs were due to the higher coupon rates on the EUR500 million six-year green bond issued in January this year compared to the maturing 2020 bond that was issued when base rates were negative. The higher net interest costs were partly offset by lower interest on unhedged floating-rate borrowings.
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As at June 30, portfolio occupancy stood at 92.4%, down from 93% as at June last year. Portfolio weighted average lease expiry (WALE) stood at 5.1 years, up from 4.8 years last year.
Net gearing stood at 41.8%, 1.6 percentage points higher h-o-h and 2.9 percentage points higher y-o-y.
Looking ahead, the trust says geopolitics remains a “key uncertainty” although the US administration policies could bring about “more business-friendly EU policies, such as Germany’s recent fiscal easing to boost defence and infrastructure spending, which could support demand for warehouse and manufacturing space”.
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“If increased tariffs slow economic activity in the short to medium term, European central banks may respond with rate cuts, potentially accelerating real asset yield compression,” reads the statement.
“SERT’s portfolio performance and valuation momentum reinforce our confidence in the strength and resilience of our assets. Strategic leasing activities, coupled with active asset management, have driven occupancy rates and rental growth across all sectors,” says Simon Garing, CEO of the managers. “Our proven ability to adapt and capitalise on market opportunities, such as recent investments in high-growth data centre platforms, underscores the quality and potential of our portfolio. We remain confident that, supported by strong valuations and ongoing portfolio enhancements, SERT is well-positioned to deliver sustainable, risk-adjusted returns in the mid to long term.”
As at 9.30am, units in SERT are trading 2 cents lower or 0.83% down at $2.38. Units in SERT’s European counter are trading flat at EUR1.59.
