Stoneweg Europe Stapled Trust: 8% yield into a pivotal 2026, too cheap to ignore? | FSMONE

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Stoneweg Europe Stapled Trust (SERT) reported a FY2025 distribution per stapled security (DPS) of 13.39 Euro cents, a 5.1% decrease year-over-year. Despite a 5.7% decline in distributable income due to increased net interest costs, SERT&rsquo s portfolio valuation increased by 1% to EUR2.16 billion. The trust&rsquo s occupancy rate stood at 92.6%, with a weighted average lease expiry (WALE) of 4.9 years.

Phillip Securities and RHB have given the counter a &lsquo buy&rsquo rating

 

[SINGAPORE] Phillip Securities and RHB have named   Stoneweg Europe Stapled Trust (Sert)   : SET +3.13% as a preferred stock pick in their strategy outlook reports for 2026. 

 

The pan-European stapled group was assigned a &ldquo buy&rdquo rating by both brokerages. Phillip Securities had a target price of 1.86 euros for the counter while RHB&rsquo s was 1.90 euros, representing an upside of 16.3 per cent and 18.8 per cent, respectively, from the trust&rsquo s last closing price of 1.60 euro on Monday (Jan 5).

 

Phillip Securities in a Monday report named Sert in its Phillip Absolute list of top 10 picks for a model portfolio for 2026. The brokerage noted that Sert &ndash which comprises Stoneweg European Real Estate Investment Trust (E-Reit) and Stoneweg European Business Trust &ndash is the sole Reit in the yield category.

 

&ldquo We find the yield attractive at 8 per cent, with dividend growth returning as debt refinancing is completed,&rdquo said Paul Chew, Phillip Securities head of research. 

 

In a market outlook strategy report dated December, RHB named the stapled group in its list of preferred small-cap picks. The list identifies &ldquo high-quality small-cap names best positioned to benefit from renewed investor interest and structural fund inflows&rdquo .

 

RHB pointed to Sert&rsquo s &ldquo good mix&rdquo of logistic and prime office assets, the strength of its management team, and its under-rented portfolio of assets as part of its investment thesis for the stapled group. 

 

Moreover, &ldquo value-added strategies&rdquo such as Sert&rsquo s data centre development fund, alongside asset redevelopment and its recycling of assets, stand to produce higher yields for the stapled group, said RHB analyst Shekhar Jaiswal.

 

Rate cuts as potential tailwinds for S-Reits

Sert could be a beneficiary of &ldquo expected sharp interest rate cuts&rdquo by the European Central Bank, noted RHB.

 

With softening inflation data in the Eurozone raising prospects for aggressive rate cuts, the brokerage has assigned overseas Singapore-listed Reits, including Sert, an &ldquo overweight&rdquo rating.

 

&ldquo With more rate cuts on the cards and an improving economic outlook, this could spark a revival of some of the overseas S-Reits that have been more severely and directly impacted by the effects of higher interest rates when compared to their Singapore peers,&rdquo it said. However, RHB flagged spillover effects from the Russia-Ukraine war and a potential resurgence of inflation as risks for these Reits.

 

Phillip Securities concurred that further interest-rate cuts could be growth catalysts for S-Reits such as Sert.

 

Noting that inorganic expansion via asset recycling could also provide tailwinds for the sector, it assigned S-Reits an &ldquo overweight&rdquo rating, with a preference for the retail subsector &ndash which is supported by continued high single-digit positive rent reversions, driven by below-average occupancy costs and limited new supply.

Following the divestment, the trust&rsquo s exposure to Italy will fall from 18% to 17%

 

[SINGAPORE] The managers of   Stoneweg Europe Stapled Trust (Sert)   : SET +1.24% on Friday (Dec 19) said that it has entered an agreement to sell a non-core office property in Italy &ndash Amba Aradam Rome (Maxima) &ndash for a consideration of 34 million euros (S$51.4 million). 

 

Maxima is a single building with a total lettable area of 16,689 square metres, and was completed in the late 1950s. It was the historical headquarters of the national social security institution for the Lazio region. 

 

The statement indicates that the transaction was completed at 8.3 million euros, or a 32 per cent premium, above the June 2025 valuation. 

 

As at Jun 30, the property was independently valued at 25.7 million euros by JLL, as commissioned by the manager and by Perpetual Asia Limited, in its capacity as trustee of Sert. 

 

The asset delivered superior value as a hotel redevelopment, supported by its prime central Rome location, said Simon Garing, chief executive officer of the managers of the trust, though an &ldquo office reconversion strategy&rdquo had been explored previously. 

 

Net proceeds from the sale will be applied towards reducing the revolving credit facility, general working capital purposes, and/or reinvestment into other opportunities that offer higher risk-adjusted returns. 

 

Following the divestment, the trust&rsquo s exposure to Italy will fall from 18 per cent to 17 per cent, noted a Friday bourse filing. 

 

Sert&rsquo s total divestments in 2025 after this move will also amount to 140 million euros, achieved at a blended 5.6 per cent premium to the latest independent valuations. 

 

Since 2022, the trust has sold 409.1 million euros of assets at an average 11 per cent premium to the latest independent valuations, in line with the around 400 million euro divestment strategy announced in response to the rise in interest rates that year. 

 

This strengthens Sert&rsquo s debt maturity profile and liquidity position

 

[SINGAPORE] The managers of Stoneweg Europe Stapled Trust (Sert) on Thursday (Dec 18) announced that it has refinanced and extended an 85 million euro (S$128.9 million) unsecured facility. 

 

As part of its balance-sheet optimisation programme, this strengthens Sert&rsquo s debt maturity profile and liquidity position, added its managers. Sert is a stapled group comprising Stoneweg European Real Estate Investment Trust (E-Reit) and Stoneweg European Business Trust.

 

Stoneweg E-Reit Lux Finco, an indirect wholly owned subsidiary of Stoneweg E-Reit, on Tuesday entered an agreement to amend and restate an existing facility agreement dated Nov 12, 2019. This is to extend the agreement&rsquo s termination date and introduce credit-rating features in relation to the calculation of the facility margin. 

 

Previously, the facility agreement was amended and restated on Mar 8, 2023, and further amended on Sep 13, 2024, and Jan 15, 2025. 

 

The amended and restated term loan facility agreement is for an aggregate amount of 85 million euros, of which 70.6 million euros will be initially drawn down to refinance an outstanding loan of Stoneweg E-Reit Lux Finco. 

 

Pursuant to an accordion increase option, the facility may be increased to up to 185 million euros, noted the managers. Its proceeds will go towards general corporate funding purposes, including the refinancing of the 70.6 million euro loan.