Stoneweg Europe Stapled Trust: Delivered modest growth in DPS

Distribution per stapled security (DPS) grew by 1.5% year-on-year

1Q 2026 gross revenue declined 1.3% year-on-year, mainly due to divestments of non-core assets in 2025.  As of end-March 2026, Stoneweg Europe Stapled Trust has completed the recycling into core assets.  Specifically, they sold lower-yielding Polish office and invested in higher-yielding logistics and data centres. 

Net property margin was 62.5% in 1Q 2026, unchanged from 1Q 2025.  The operation remains resilient amid the current US-Iran conflict-driven  energy price hikes.  As the leases are on triple-net basis, the tenants bear the utility costs. The portion of utility cost borne by Stoneweg Europe Stapled Trust accounts for less than 0.5% of operating expenses.   

Distributable income increased by 0.4% year-on-year, to €18.99 million while DPS rose to Euro cents 3.423, an increase by 1.5% year-on-year.  This reflects the impact of securities buybacks.   

On a like-for-like basis, excluding FY2025 divestments and 1Q 2026 acquisitions, net property income (NPI) grew 2.3% year-on-year.  In 1Q 2026, Logistics / Light industrial outperformed, +3.7% year-on-year, partly offset by Office, -1% year-on-year. 

Capital management - well-hedged debt profile till 2030

Proforma net gearing as at 31 March 2026 was 42.7%, compared to 38.0% as at 31 December 2025. The proforma net gearing included the Riverside disposal in April 2026.  Riverside was sold for €22.5 million, or at a 5.1% premium to valuation. 

Average all-in rate of 3.84% as at 31 March 2026 was relatively stable compared to 3.86% as at 31 December 2025.   

As at 31 March 2026,  87% of the total debt is fixed or hedged using interest rate cap or swaps contracts, till late 2027. This included  the recent extension of a €160 million interest rate hedge to November 2028.

Going forward, the interest costs will likely remain stable.   Stoneweg Europe Stapled Trust does not have any debt maturities till late 4Q 2030, other than the revolving credit facility.  This provides exceptional income visibility and refinancing insulation. 

Portfolio reset completed and data centre strategy to drive income

Stoneweg Europe Stapled Trust 's 97-asset, €2.2 billion portfolio delivered 92.8% occupancy as at 7 April 2026.  In 1Q 2026, Western Europe maintained stronger occupancy, at 93.7%, relative to Central Europe at 85.4%.

Logistics asset outperformed, registered rent reversion of +7.6% in 1Q 2026, the strongest in recent quarters, reflects the structural under-renting of the portfolio. Italy is fully occupied at 100%; Netherlands at 98.1%.  Around 30,033 sqm of leases were signed or renewed in 1Q 2026.

Office assets registered rent reversion of -2.8% in 1Q 2026, impacted by three small leases (1,095 sqm) at non-core assets in Poznan, Helsinki, and Paris.

Stoneweg Europe Stapled Trust’s portfolio is under-rented, implying potential for net property income growth as leases roll to market levels.  Across the portfolio, the December 2025 independent valuation reports under-renting of 8.2%. 

Coupled with CPI-linked indexation across 965 leases,  we expect resilient positive rental growth.  Separately, Green Street is projecting 3.2% per year in European industrial rental growth through 2030.

Updates on data centre investments

Stoneweg Europe Stapled Trust is adopting a dual track strategy to achieve a data centre sector allocation of 15–25% of total portfolio by FY2028.  As at 31 March 2026, data centre sector accounts for around 7.1% of portfolio value.   

Stoneweg Europe Stapled Trust has identified over 10 sites that could potentially be converted to data centre.  Currently at the planning stage, it will take two to four years to implement the conversion. 

The flagship conversion project, Parc Des Docks in Paris, is expected to reach key milestones over the next 1-2 years.  The project has attracted interest from major hyperscaler.  Uniquely located in Central Paris, the project is adjacent to a waste-to-energy power plant and the central district heating supplier.  These elements lead the project to be carbon negative, hence attracting large AI hyperscalers.

To recap, in June 2025, Stoneweg Europe Stapled Trust invested €50m into AiOnX data centre fund.  AiOnX consists of five early-stage data centre development sites with a substantial scale of up to 2.2 gigawatts (GW) in total power capacity.  The investment has recorded a 41% valuation uplift since investment.   

AiOnX's five development sites span Dublin (179 MW target), Madrid (600 MW), Varde Denmark (800 MW), Milan (150 MW) and Cambridge UK (530 MW), representing a >€30 billion gross development value pipeline. 

The first 16 MW phase in Dublin is expected to be operational in late 2026, with rent commencing from a major US hyperscaler.

Stoneweg Europe Stapled Trust made a second tranche investment in March 2026, investing another €50 million in AiOnX via a mandatory convertible loan carrying a coupon of 7.25% per annum with a seven-year tenure. This stable income translates to 2% accretion to Distribution per stapled security (DPS). 

We are positive on the REIT’s pivot towards this fast-growing asset class.  It has secured early-stage exposure through its sponsor relationship. SWI Group is the manager of AiOnX.  When completed, AiOnX will be one of the largest data centre  owners in Europe.  This asset will drive the capital appreciation and income generation potential of the REIT in future.

Maintain BUY and target price at €1.73 

Stoneweg Europe Stapled Trust is trading at €1.55, implying FY2026E distribution yield of 8.8%  In comparison, Elite UK REIT and IREIT Global are trading at FY2026f distribution yield of 10.3% and 6.4%, respectively.  Elite UK REIT’s higher yield reflects the portfolio’s smaller scale. 

Although the management has guided for  FY2026E distribution per stapled security, we think there is upside potential from the data centre assets.   In addition, the data centre valuation will provide upside to the net asset value upon biannual revaluation of AiOnX. 

Stoneweg Europe Stapled Trust is trading at FY2025 price-to-book 0.79x, below the sector average PB of 0.86x.  Given the discount to net asset value (NAV), the management has decided to continue with unit buybacks in 2026. 

Key risks 

Key risks include interest rate risk, weak office demand, limited debt headroom, execution risk and macroeconomic risk.   

Interest rate and refinancing risk

It is exposed to movements in European interest rates which have remain elevated relative to the low-rate environment seen in prior years. Higher all-in funding costs directly increases interest expense and reduces distributable income.

What this really means is that even if the underlying property income remains stable, distributions can still come under pressure due to financing costs alone. The pace and timing of rate cuts, as well as its ability to manage its debt maturity profile and hedging strategy, will be key in determining the extent of this impact. 

It actively manages its debt profile through a mix of fixed and hedged borrowings and maintains a well-staggered debt maturity profile. 

Office sector weakness

Office assets is a segment facing structural and cyclical headwinds across Europe. Demand for office space has softened in certain markets due to hybrid work trends, corporate cost rationalisation, and tenant downsizing. This has resulted in lower occupancy rates and weaker rental reversions compared to logistics assets. 

Stoneweg Europe Stapled Trust is gradually reducing its exposure to office assets through selective divestments, while increasing allocation to logistics and light industrial properties. This strategic shift helps rebalance the portfolio towards sectors with stronger demand fundamentals and more resilient occupancy.

Leverage and limited debt headroom

Its gearing remains in the low-40% range, which is below regulatory limits but leaves only moderate headroom for additional borrowing. This constrains financial flexibility, particularly in a rising rate environment where maintaining balance sheet discipline is critical. This limits its ability to pursue acquisitions or fund large-scale redevelopment without raising equity. Ongoing divestments of non-core assets can free up capital and create additional headroom. The REIT also has access to multiple funding channels, including bank debt and capital markets, allowing it to optimise its capital structure.  

Execution risk in portfolio repositioning

The REIT is actively repositioning its portfolio while undertaking asset enhancement initiatives and redevelopment projects to improve asset quality and ESG credentials.  We think the execution risk is mitigated by the strong support from an experienced sponsor, SWI Group, which has an established track record. This provides operational expertise and access to deal flow. For instance, the REIT has invested into the data centre platform at the early development stage. 

Macroeconomic and valuation risk

SERT’s portfolio is concentrated in Europe, exposing it to regional macroeconomic conditions including GDP growth, inflation, and monetary policy. A weaker economic outlook could dampen tenant demand, reduce leasing activity, and put downward pressure on rents across certain markets.

Related links:

• Stoneweg Europe Stapled Trust share price history and share price target
• Stoneweg Europe Stapled Trust history and dividend forecasts

Download the full report here. 

Check out Beansprout's guide to the best stock trading platforms in Singapore with the latest promotions to invest in Stoneweg Europe Stapled Trust.

Join the Beansprout Telegram group for the latest insights on Singapore stocks, REITs, bonds and ETFs. 

Important Disclosures

Analyst Certification and Disclosures 

The analyst(s) named in this report certifies that (i) all views expressed in this report accurately reflect the personal views of the analyst(s) with regard to any and all of the subject securities and companies mentioned in this report and (ii) no part of the compensation of the analyst(s) was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst herein. The analyst(s) named in this report (or their associates) does not have a financial interest in the corporation(s) mentioned in this report.

An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst.

Company Disclosure

Global Wealth Technology Pte Ltd (“Beansprout”) does not have any financial interest in the corporation(s) mentioned in this report.

Disclaimer

This report is provided by Beansprout for the use of intended recipients only and may not be reproduced, in whole or in part, or delivered or transmitted to any other person without our prior written consent. By accepting this report, the recipient agrees to be bound by the terms and limitations set out herein.

You acknowledge that this document is provided for general information purposes only. Nothing in this document shall be construed as a recommendation to purchase, sell, or hold any security or other investment, or to pursue any investment style or strategy. Nothing in this document shall be construed as advice that purports to be tailored to your needs or the needs of any person or company receiving the advice. The information in this document is intended for general circulation only and does not constitute investment advice. Nothing in this document is published with regard to the specific investment objectives, financial situation and particular needs of any person who may receive the information. 

Nothing in this document shall be construed as, or form part of, any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities. The data and information made available in this document are of a general nature and do not purport, and shall not in any way be deemed, to constitute an offer or provision of any professional or expert advice, including without limitation any financial, investment, legal, accounting or tax advice, and shall not be relied upon by you in that regard. You should at all times consult a qualified expert or professional adviser to obtain advice and independent verification of the information and data contained herein before acting on it. Any financial or investment information in this document are intended to be for your general information only. You should not rely upon such information in making any particular investment or other decision which should only be made after consulting with a fully qualified financial adviser. Such information do not nor are they intended to constitute any form of financial or investment advice, opinion or recommendation about any investment product, or any inducement or invitation relating to any of the products listed or referred to. Any arrangement made between you and a third party named on or linked to from these pages is at your sole risk and responsibility. 

You acknowledge that Beansprout is under no obligation to exercise editorial control over, and to review, edit or amend any data, information, materials or contents of any content in this document. You agree that all statements, offers, information, opinions, materials, content in this document should be used, accepted and relied upon only with care and discretion and at your own risk, and Beansprout shall not be responsible for any loss, damage or liability incurred by you arising from such use or reliance. 

This document (including all information and materials contained in this document) is provided “as is”. Although the material in this document is based upon information that Beansprout considers reliable and endeavours to keep current, Beansprout does not assure that this material is accurate, current or complete and is not providing any warranties or representations regarding the material contained in this document. All opinions contained herein constitute the views of the analyst(s) named in this report, they are subject to change without notice and are not intended to provide the sole basis of any evaluation of the subject securities and companies mentioned in this report. Any reference to past performance should not be taken as an indication of future performance. To the fullest extent permissible pursuant to applicable law, Beansprout disclaims all warranties and/or representations of any kind with regard to this document, including but not limited to any implied warranties of merchantability, non-infringement of third-party rights, or fitness for a particular purpose. 

Beansprout does not warrant, either expressly or impliedly, the accuracy or completeness of the information, text, graphics, links or other items contained in this document. Neither Beansprout nor any of its affiliates, directors, employees or other representatives will be liable for any damages, losses or liabilities of any kind arising out of or in connection with the use of this document. To the best of Beansprout’s knowledge, this document does not contain and is not based on any non-public, material information. The information in this document is not intended for distribution to, or use by, any person or entity in any jurisdiction where such distribution or use would be contrary to law or regulation, or which would subject Beansprout to any registration requirement within such jurisdiction or country. Beansprout is not licensed or regulated by any authority in any jurisdiction or country to provide the information in this document.

As a condition of your use of this document, you agree to indemnify, defend and hold harmless Beansprout and its affiliates, and their respective officers, directors, employees, members, managing members, managers, agents, representatives, successors and assigns from and against any and all actions, causes of action, claims, charges, cost, demands, expenses and damages (including attorneys’ fees and expenses), losses and liabilities or other expenses of any kind that arise directly or indirectly out of or from, arising out of or in connection with violation of these terms, use of this document, violation of the rights of any third party, acts, omissions or negligence of third parties, their directors, employees or agents. To the extent permitted by law, Beansprout shall not be liable to you, any other person, or organization, for any direct, indirect, special, punitive, exemplary, incidental or consequential damages, whether in contract, tort (including negligence), or otherwise, arising in any way from, or in connection with, the use of this document and/or its content. This includes, without limitation, liability for any act or omission in reliance on the information in this document. Beansprout expressly disclaims and excludes all warranties, conditions, representations and terms not expressly set out in this User Agreement, whether express, implied or statutory, with regard to this document and its content, including any implied warranties or representations about the accuracy or completeness of this document and the content, suitability and general availability, or whether it is free from error. 

If these terms or any part of them is understood to be illegal, invalid or otherwise unenforceable under the laws of any state or country in which these terms are intended to be effective, then to the extent that they are illegal, invalid or unenforceable, they shall in that state or country be treated as severed and deleted from these terms and the remaining terms shall survive and remain fully intact and in effect and will continue to be binding and enforceable in that state or country. 

These terms, as well as any claims arising from or related thereto, are governed by the laws of Singapore without reference to the principles of conflicts of laws thereof. You agree to submit to the personal and exclusive jurisdiction of the courts of Singapore with respect to all disputes arising out of or related to this Agreement. Beansprout and you each hereby irrevocably consent to the jurisdiction of such courts, and each Party hereby waives any claim or defence that such forum is not convenient or proper.