10 February 2025

• QuotedData
• Richard Williams

Winners and losers in January 2025

Source: Bloomberg, Marten & Co

Source: Bloomberg, Marten & Co

The year has started on a somewhat more positive footing than 2024 ended, with the median average share price across the real estate sector marginally up. The outlier was Ground Rents Income Fund, which has received several proposals for the company that have so far been rejected by the board (see page 3 for details). A potentially groundbreaking deal by Tritax Big Box REIT, which would see it become the largest data centre player in the UK, saw its share price rise by just over 10% in the month. It was also a positive month for fellow logistics specialist Urban Logistics REIT, which had seen its discount to NAV widen to 35% at the end of 2024. It still trades on an unjustifiably wide 30% discount. A positive quarterly trading update from Unite Group saw an in-kind positive reaction in its share price, with the student sector continuing to display compelling supply and demand characteristics and rental growth prospects. Assured inflation-linked rental growth within its care home portfolio saw Care REIT up its dividend target. Meanwhile, British Land went into partnership with an Abu Dhabi investor to unlock the development of a major City of London office scheme.

Caution remains the catchword in real estate stocks, and several continue to lose substantial value, especially for those operating in perceived troubled sub-sectors. Stale house prices and concerns around the strength of the economy weighed on housing developer Henry Boot. Meanwhile, Life Science REIT continues to struggle with a further double-digit fall in its share price. Over 12 months it has lost 40.8% in value and now trades on an astonishingly wide 55% discount to NAV. Coming off a strong 2024, in which its share price rose 14.2%, diversified specialist Schroder REIT had a bumpy start to 2025. It was a similar story for long income specialist Alternative Income REIT and its discount to NAV has now widened to almost 16%. Shareholders seem to have become wary of Phoenix Spree Deutschland’s realisation programme, with the already depressed shares falling another 4.9%. Residential Secure Income is another company undertaking a sell-off of its portfolio. The almost 5% drop in its share price in January may be down to pessimism over how much it would receive for its portfolio of retirement and shared ownership homes after it reported a 5.6% write-down in their value.

Valuation moves

Source: Marten & Co