REIT review: Real estate reels from impact of Iran war
The Iran war brought a grinding halt to the momentum that had been building in the real estate sector since the budget last November. Higher oil prices and inflation mean that interest rate rises are now likely, having been on a comforting downward trajectory for so long. As with the broader investment company market, double-digit share price falls were common across the real estate investment trust (REIT) sector in March, plunging 12.5% on average. This has undone the gains in early 2026 and brought the first quarter average fall to 8.6%.
Best performers in price terms
| (%) | |
| Macau Property Opportunities | 24.8 |
| Dolphin Capital Investors | 1.1 |
| Grit Real Estate Income Group | 0.0 |
| Ceiba Investments | 0.0 |
| Panther Securities | 0.0 |
| Abrdn European Logistics Income | (2.3) |
| Henry Boot | (2.7) |
| Globalworth Real Estate Investments | (3.6) |
| Town Centre Securities | (4.0) |
| Ground Rents Income Fund | (5.6) |
Source: Bloomberg, Marten & Co
The table of best performers tells its own miserable story. The outlier was Macau Property Opportunities (MPO), which witnessed a dead cat bounce of almost 25%. Its share price is down 75% over the past 12 months after multiple warnings from the board of shareholder losses. The other four companies to have not lost value in the month reflects the extremely low liquidity in their shares and/or the fact they had already suffered severe value destruction over recent years.
Worst performers in price terms
| (%) | |
| SEGRO | (23.5) |
| CLS Holdings | (23.2) |
| First Property Group | (23.2) |
| International Workplace Group | (21.4) |
| Workspace Group | (20.6) |
| Hammerson | (20.0) |
| Safestore Holdings | (20.0) |
| Conygar Investment Company | (19.7) |
| Big Yellow Group | (18.8) |
| Great Portland Estates | (18.4) |
Source: Bloomberg, Marten & Co
Perhaps inevitably, the largest UK-listed REIT – SEGRO (SGRO) – suffered the most as investors retreated from risky assets like property. Like most in the property sector, SEGRO was bullish before Trump’s war casted a long shadow over the outlook. Office players featured heavily, with UK and European landlord CLS Holdings (CLI), flexible workspace providers International Workplace Group (IWG) and Workspace (WKP), and London developer Great Portland Estates (GPE) all among the worst performers with the prospects of a recession growing. The two listed self-storage specialists Safestore (SAFE) and Big Yellow (BYG) were also off around 20% as demand expectations are lowered in a weaker economy.
Valuation moves
| Company | Sector | NAV move (%) | Period | Comments |
| Schroder European REIT | Europe | (0.5) | Quarter to 31 Dec 25 | Property portfolio value flat at €194.0m |
| Target Healthcare REIT | Healthcare | 4.0 | Half-year to 31 Dec 25 | Like-for-like portfolio valuation increase of 3.1% to £894.6m |
| Alternative Income REIT | Diversified | 1.0 | Half-year to 31 Dec 25 | Portfolio value slightly up over the period to £103.5m |
| Supermarket Income REIT | Retail | 0.5 | Half-year to 31 Dec 25 | Portfolio valuation increased by 1.3% on a like-for-like basis to £2.1bn |
| Town Centre Securities | Diversified | (3.1) | Half-year to 31 Dec 25 | Like-for-like portfolio valuation down 1.2% to £257.9m |
| Harworth Group | Developer | 0.9 | Full year to 31 Dec 25 | Valuation gains driven by industrial and logistics portfolio |
| Primary Health Properties | Healthcare | (3.9) | Full year to 31 Dec 25 | NAV impacted by Assura merger costs. Portfolio now valued at £6.0bn |
| Real Estate Investors | Diversified | (4.3) | Full year to 31 Dec 25 | Like-for-like portfolio valuation reduced by 2.6% to £113.3m |
| Social Housing REIT | Residential | (4.9) | Full year to 31 Dec 25 | Portfolio valued at £606.3m, representing a decline of 3.2% over the period |
| CLS Holdings | Offices | (6.7) | Full year to 31 Dec 25 | Portfolio valuation fell 3.8% to £1.7bn |
| Regional REIT | Offices | (7.5) | Full year to 31 Dec 25 | Like-for-like portfolio valuation decreased by 5.0% year-on-year to £555.2m |
Source: Marten & Co
Reliable, inflation-linked income looks especially attractive right now. Target Healthcare REIT’s (THRL) half-year returns were boosted by indexed annual uplifts across its care home portfolio. Primary Health Properties’ (PHP’s) numbers were skewed by the costs of its merger with Assura during the period, but its secure, long-term and predictable income stream continues to deliver earnings and dividend growth. It has now increased its dividend for 30 years in a row. Downward valuation pressures persist at office landlords CLS Holdings (CLI) and Regional REIT (RGL).
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