Stoneweg Europe Stapled Trust– Attractive yield with re-rating potential August 17, 2026 10

PSR Recommendation: BUY Status: Maintained
Last Close Price: 1.56 Target Price: 1.89
  • 1H26 DPS of 6.642 €cents rose 1.4% YoY, in line with our estimates and forming 50% of our FY26e forecast. DI increased 0.3% YoY, as the impact of divestments and higher finance costs was offset by acquisitions and strong logistics/light industrial income growth. 1H26 included €2mn, or 0.369 €cents per security, of income from AiOnX investments, contributing c.5.6% of 1H26 DPS.
  • Portfolio occupancy improved 0.9 ppts QoQ to 93.7%, with 69k sqm of leases (4.3% of portfolio) secured in 2Q26 at a strong 8% positive rent reversion. Portfolio valuations rose for the fifth consecutive half-year, increasing 1.1% on a like-for-like basis in 1H26, driven by higher passing and market rents.
  • Maintain BUY with an unchanged DDM-derived TP of €1.89 and no change to our forecasts. Organic growth will be supported by the logistics portfolio, which delivered a strong 9.6% rent reversion in 1H26, alongside €205mn of planned AEIs at a 6.3%-6.6% yield-on-cost. In addition, SERT’s investment in AiOnX offers recurring coupon income and potential capital gains as development milestones are achieved. Re-rating catalysts to narrow the 24% discount to NAV include potential changes to management arrangements, governance and fee structures, including possible internalisation, if these improve alignment with security holders and reduce costs, as well as successful deleveraging through the divestment of non-core office assets. FY26e DPS is expected to remain in line with FY25, implying an attractive 8.6% dividend yield.

 

 

 

 

 

 

 

 

 

The Positives
+ Robust operating performance, led by logistics/light industrial. Logistics/light industrial
portfolio occupancy inched up 0.1ppt to 95.2%, with strong rent reversion of +10.4% in 2Q26
(1H26: +9.6%). This was supported by >40% positive rent reversion on two new leases at
Herstedvang 2-4 (5.6k sqm) and Parc des Docks (3.1k sqm). Office portfolio occupancy rose
from 86.8% to 90.3%, partly due to the reclassification of Paryseine from office to
logistics/light industrial, with core Dutch office portfolio occupancy at 94.8%. The office
portfolio saw a -5.8% rent reversion in 2Q26 (1H26: -4.1%), driven by occupancy-focused
leasing over higher rents at the weaker-performing Finnish assets earmarked for sale.

+ Strong financial position. With 90% of debt hedged or fixed until late 2027, the average
all-in interest rate for FY26e is expected to remain around 4% (1H26: 3.9%), despite the
widely expected ECB rate hike in September. Net gearing improved from 42.7% to 41.9%
QoQ and is expected to trend towards the upper end of management’s 35%-40% target
range over time, supported by further planned asset sales of non-core office assets. The MAS
ICR remained healthy at 2.5x.

 

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About the author

Profile photo of Darren Chan

Darren Chan
Research Analyst
PSR

Darren has over three years of experience on the buy-side as a fund manager. During his time as fund manager, he has managed multiple funds and mandates including dividend income, growth, customised, Singapore focused and regionally focused funds. He graduated from the University of London with a First-Class Honours degree in Banking and Finance.

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