Half-year Financial Report

TR Property Investment Trust plc

London Stock Exchange Announcement

Unaudited results for the six months ended 30 September 2025

Legal Entity Identifier: 549300BPGCCN3ETPQD32

Information disclosed in accordance with Disclosure Guidance and Transparency Rule 4.2.2

Kate Bolsover, Chairman:
" This half year marks a genuine turn in the income story. Revenue rose 23% compared with the same period in 2024, reaching 10.07p per share. The Board is pleased to increase the interim dividend to 5.75p. Income momentum is rebuilding and it is good to see our direct property assets contributing meaningfully once again. After several years in which uncertainty has overshadowed fundamentals, it is encouraging to see full dividend cover move back into sight - complementing healthy share price and net asset value returns." 

Marcus Phayre-Mudge, Fund Manager:

" This period has been a classic tug-of-war: political uncertainty and higher-for-longer rates on one side, solid real estate fundamentals and a flurry of corporate activity on the other side. Over the half year, the positives have quietly pulled ahead, with the portfolio delivering a double-digit NAV return. Financing costs are easing, corporate activity is back on the front foot and high-quality assets remain in short supply. It is not a fairytale recovery, but the building blocks for further progress are firmly in place."

Financial highlights and performance

¹ Net debt is the total value of loan notes, loans (including notional exposure to contracts for difference ('CFDs') less cash as a proportion of net asset value.       

² The NAV Total Return for the period is calculated by reinvesting the dividends in the assets of the Company from the relevant ex-dividend date. Dividends are deemed to be reinvested on the ex-dividend date as this is the protocol used by the Company's benchmark and other indices.                 

³ The Share Price Total Return is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date.

⁴ Ongoing Charges are calculated in accordance with the AIC methodology. Ongoing charges provided for the half year are based on estimated expenses and charges and provide indicative values only.                                                       

⁵ Considered to be an Alternative Performance Measure as defined in the Half Year Report.                                                 

Chairman's statement

Market backdrop

I highlighted in June that our sector is very much part of the 'value' end of the equity landscape. Given the ongoing global investor focus on technology and 'growth' stocks, alongside the dominance of the US, it is pleasing to report that the Company, which focuses on pan-European real estate equities, has produced a double-digit return for the first six months of its financial year. Whilst we remain an under-owned part of the equity market, underlying real estate fundamentals continue to support rental and earnings growth.

I have often emphasised the sector's need for capital - in particular debt - and it is very encouraging to report a tightening in spreads alongside the central bank-driven reductions in base rates across Europe. Competition amongst lenders is very real and the Company has, during the period, had first-hand experience of improving (versus expectation) margins on its revolving credit facilities.

As you will read later, our Manager remains optimistic; not only about the supportive demand/supply dynamic in so many of our markets but, crucially, about the low valuations applied to the listed companies through which we get the vast majority of our exposure. This valuation mismatch has resulted in the Company continuing to maintain a record low physical property exposure and a record high equity exposure. Having said that, we are pleased with the progress that the direct property team have made on a range of asset management initiatives, particularly at Wandsworth and Bicester. More details are given in the Manager's Report and will follow in the next annual report.

Geo-political risks remain at the forefront of our minds and focusing on balance sheet strength and quality of earnings remains a central plank of our investment approach. This does mean that our Manager can miss out on the full benefits of 'beta rallies' - when all boats are lifted almost regardless of quality. It also means that we have not always been on the winning side of mergers where a higher-rated acquirer uses its stronger stock to acquire a lower grade, more heavily discounted business - as it is usually the latter that gets the immediate increase in share price. A couple of examples are given in the Manager's report. More encouragingly, our Manager continues to be very engaged with small cap consolidation (or failing that privatisation), a process which has been running for several years and where this half year saw yet more positive activity. 

Revenue Results, Outlook and Dividend 

Revenue earnings for the half year were 10.07p per share, an increase of 23% compared to the level reported for the half year to 30 September 2024.

We are continuing to see a recovery in earnings from the sector, with the majority of companies in the portfolio having increased their dividends year on year. Income from our direct property portfolio increased 69% compared to the first six months of the previous financial year following the purchases of industrial assets at Northampton and Bicester.

We anticipate that the full year revenue earnings (to March 2026) will be ahead of the previous full year. Our income is significantly skewed to the first half of the year whilst most of our finance costs and expenses are spread evenly across the year, therefore, we do not expect to see such a significant increase in the second half.

The Board is aware of the importance to shareholders of a growing annual dividend. Despite a fall in earnings since the March 2023 year end, the annual dividend has modestly increased; something we have been using our revenue reserves to achieve. With the current trajectory of increasing earnings, the Board is confident that the annual dividend will return to being fully covered. However, it is anticipated that a modest contribution from revenue reserves for the current financial year will be required.

In recent years, increases have been made through the final dividend which has widened the gap between the historically smaller interim dividend and the final. Seeking to redress that balance marginally, the Board has increased the interim dividend to 5.75p, a small rise of 1.8%. Shareholders should not take this as an indication of the likely level of increase in the final dividend.

Net Debt and Currencies 

Gearing decreased marginally over the first half of the financial year from 18.5% to 18.0%. Net borrowings were broadly unchanged in absolute terms however the Company's net asset value ('NAV') has increased.

Sterling weakened by an average of 2.2% over the half year, delivering a positive impact in income terms for the non-sterling denominated income that accounts for 64% of the total income reported for the half year. Whilst the income is unhedged and subject to exchange rate fluctuations, the currency exposure of the portfolio is hedged in line with the benchmark.

Discount 

The Company's shares traded at an average discount of 8.5% over the period, narrowing from 10.1% at the end of March to 8.9% at the end of September. This is wider than the five-year average of 6.6%, reflective of the under-ownership of the sector referred to in my opening paragraph.

Awards

I am pleased to report that the Company has recently won two prestigious awards. It won 'Best PR Campaign' at the AIC Shareholder Communication Awards 2025. This is further vindication of the Manager's and our PR consultants, Aspectus' efforts to raise and maintain the Company's profile and engagement with private, direct investors as well as our long standing institutional and wealth manager shareholders. The Company was also named Investment Company of the Year in the Property sector at the 2025 Investment Week awards. Finally, we are very pleased to have received a Gold rating from Morningstar.

Outlook

The outlook for pan-European economic growth is foggy. The region is in the midst of a huge shift in the global geo-political landscape. In recent decades, Europe outsourced security to the US; much of its production to China; and had become increasingly reliant on Russian gas. Termination of the latter has been both costly and disruptive but is much less of an issue than it was as recently as two years ago. The need to deliver a European-funded defence capability will now be an important driver of all European economies, particularly Germany and its neighbours such as Poland and Finland. Such growth in manufacturing will be a significant fillip for industrial and logistics real estate and the German 'fiscal bazooka' has many years of deployment ahead of it. Real estate is also benefitting from the desire of many companies to manage supply chain risk by bringing more production and component storage closer to the customer. Set against these drivers for growth there are more fundamental concerns around the funding of welfare and ageing populations. Politicians' clear reluctance to make hard choices has resulted in inflation remaining stubbornly high, particularly in the UK. However, elsewhere in Europe inflation is falling alongside slowing job growth. The uncertainly generated by the tariff wars has resulted in the deferral of investment decisions, whilst uncertainty around job security and personal taxation discourages individual consumption. This slower growth outlook is likely to lead to further cuts in base rates by all European central banks.

Our asset class is very sensitive to the cost of debt and though economic slowdowns are not welcome, the reduction in the cost of borrowing certainly is. The key is how much this deceleration in growth impacts job creation, consumer behaviour and corporate expansion. For our Manager this backdrop only heightens the need to maintain exposure to the very best-in-class assets - those with balance sheets which are not only robust but can also be flexed as opportunities arise.

Ultimately, our sector remains materially under owned - currently viewed as a stalwart 'value' equity, at a time when many major indices are soaring to all-time highs. But underneath this unglamorous exterior lies steady earnings growth, fuelled by easing debt costs and rental growth for top tier assets. It is quite feasible that these more dependable income-focused equities become increasingly sought after if global equity markets experience greater volatility.

Kate Bolsover

Chairman

1 December 2025

Manager's report

Performance

The Company's net asset value ('NAV') total return for the six months to 30 September 2025 was a healthy +10.6%, whilst the share price total return was slightly better at +12.4%. The benchmark, the FTSE EPRA/NAREIT Developed Europe Capped Net Total Return Index (in sterling), returned +9.6% in the period. The sector continues to trade in a tight range following the 2021-2023 sell-off.

The weakness we saw in the second half of the last financial year (September 2024 to March 2025) accelerated in the opening weeks of the new financial year with President Trump's self-styled 'Liberation Day' tariff announcements. Our sector was not immune, dropping over 8% between the 3rd and 9th April, only to rebound as rapidly as broader equity markets. There followed, until the end of June, a steady recovery in our sector. As I wrote in the Annual Report and I am happy to reiterate in this half year update, the fundamentals in so many of our markets are sound. The difficulty in financing development, the rapid increase in build costs and the elevated returns required by investors has squeezed construction starts. Supply of best-in-class assets remains tight. We have continued to focus on companies with those higher quality portfolios.

Alongside these stable underlying market fundamentals, last year's concerns around stubborn inflation (particularly for service sector wage inflation) appear to be waning. European economies are slowing down, with lower job growth figures feeding through. However, some of this weaker sentiment and reluctance to hire workers or engage in broader corporate expansion is politically driven. The UK and French political establishments have both (in their own ways) managed to deter businesses from making decisions by generating instability and uncertainty. This has, in the case of France, significantly driven up the cost of sovereign debt, which weighs on the valuation of all risk assets. For the UK, property (commercial and residential) is clearly in the crosshairs for a Chancellor looking to raise tax revenue, not least because it is immoveable. We are, therefore, not surprised that UK and French real estate equities have had a subdued period of performance over the summer and through September. For generalist investors looking for ways to reflect a negative country viewpoint, property stocks are a likely choice given their very high levels of domestic earnings. For the UK, meaningful non-domestic exposure is rare, found only in SEGRO among the large caps and Sirius among the mid-caps.

Whilst this political uncertainty is very much confined to the UK and France rather than the whole of Europe, almost of greater importance has been the continued steady reduction in base rates from all European central banks. Though the longer end of the yield curve has remained stubbornly elevated, it is very pleasing to report a continued reduction in the spreads/margins which lenders and the bond markets are charging. More detail follows in the Debt and Equity Markets section of this report.

The final component of our bull case, alongside constrained supply dynamics and cheapening cost of finance, is corporate activity. The continued raising of capital for offensive (as opposed to defensive) purposes, taking advantage of market opportunities and growing the asset base of listed property companies. This is a healthy sign for investor sentiment and there are more examples later in this report. Alongside this sits merger and acquisition ('M&A') activity, which is taking two main forms. First, ongoing consolidation, as sub-scale real estate investment trusts ('REITs') combine to achieve greater liquidity, scale efficiencies, and stronger shareholder earnings. Second, privatisations, which remain an important feature of the landscape. Both forms of M&A are typically value-accretive for shareholders and, crucially, the potential for further transactions provides a solid underpin to current valuations.

The period under review witnessed the conclusion of the significant battle between private equity (KKR) and a listed property company (Primary Health Properties, 'PHP') for control of Assura, the only other owner of primary healthcare facilities (following the sale of Care REIT to a US peer). This four-month bidding war concluded with the board of Assura, correctly in our view, switching its recommendation from KKR to PHP, thus ensuring victory for the listed party. It is rare to see a listed company succeed against deep pocketed and more highly-leveraged private buyers. We are pleased to see these healthcare assets remain in the public domain rather than being sold at a low point in the valuation cycle. We had been supporters of PHP for many years given its superior total shareholder return versus Assura and look forward to the Assura assets coming under the PHP management capability.

In Continental Europe, we saw a more congenial merger of two healthcare REITs, Cofinimmo and Aedifica. The combined entity will be the fourth largest healthcare REIT globally and there are large synergies to be gained from the overlap between these care home operators. Whilst this is an all-paper transaction, it is in reality a takeover of Cofinimmo by Aedifica, with the target's share price total return reaching 31% over the period. We owned the higher quality business (Aedifica) and not the acquired. Whilst we welcome the larger entity, the transaction was not on our radar as a possibility given Cofinimmo's 20% Brussels office exposure, which Aedifica will now need to resolve and dispose of. Not owning Cofinimmo was costly (-43bps) to relative performance.

The only privatisation in the period was Warehouse REIT, an externally managed microcap owner of a diversified portfolio of industrial assets (and one large development site) which was eventually acquired by Blackstone. The sale process was tortuous. Blackstone reduced their initial offer (following due diligence, mainly around the large development site) only to then increase it once they realised, following a counter bid from Tritax Big Box, that they were actually in a competitive situation. This bidding process clearly established the market price for this portfolio but the winning bid, which equated to 115p per share (including dividend), was still 12% below the last published NAV. Another reminder that third party independent valuations need to be treated with caution.

In the last Annual Report, I wrote extensively about our involvement in the process which led to the takeover of Urban Logistics REIT by LondonMetric. Technically this event occurred in this half year and hence I am documenting this fact rather than revisiting all the details. Suffice to say we were very pleased with the outcome from both a financial and governance perspective.

Regular viewers of our webcasts and presentations will be aware of my critical views regarding the lack of alignment - and governance arrangements - in some externally managed REITs. A number of culprits here were sub-scale vehicles which raised capital in the era of very low interest rates. They invested commensurately at the peak of the cycle but lacked the specialist expertise required to manage the subsequent deterioration as the economy moved into a higher interest rate environment and occupational markets weakened. Having held Warehouse REIT briefly in the second quarter of 2023 (following the Blackstone bid for Industrials REIT) we only bought back into the company in March this year. The investment premise was that public markets were not attracted to this sub-scale portfolio, nor its management structure, and that a private equity buyer with a stronger management platform would bid a premium to the share price - but still a discount to NAV - which investors would jump at. We were proven right and therefore sold our position to Blackstone in July, making an average return of 15% over the four month holding period.

Reviewing our performance attribution, these M&A situations contributed modestly on a blended basis as the PHP/Assura merger saw the Assura share price return just 5.8% in the six months, as the majority of the share price movement (+25%) was back in February in the previous reporting period. PHP, as the acquirer, returned -0.9% in the six months under review.

At the individual stock level, our largest active overweight positions contributed the most to relative performance, which is to be expected in a rising market. TAG (+20.1%) was our star performer and the overweight position was balanced with an underweight position in Vonovia (+10.8%) the largest listed property company in Europe. Picton (+12.3%) was a large contributor by dint of the size of our holding (4.6% overweight). This microcap is finally delivering on the strategy of selling assets (at or close to book value) and buying back its shares at 25-35% discounts to NAV. This strategy is a guaranteed delivery of earnings and NAV accretion. Credit should be given to both the board and management for providing comfort to shareholders that the business is being run on their behalf and the market opportunity in the mis-priced equity is to be seized upon. Investors are waking up to the impact of this approach and correctly repricing the equity.  Covivio (+18.3%) is a diversified REIT listed in France but with office and hotel assets across Europe, alongside a substantial Berlin residential business. The latter two components have driven returns so far this year and we continue to own it despite the impact of French politics on sentiment towards French listed equities. Its see-through exposure to France is just one third of its assets.

The other two largest contributors were also French-listed. As with Covivio and Klepierre, Unibail-Rodamco-Westfield also has only about one third of its assets in France. The 25% in the US, where consumer spend remains resilient, aided their performance.

The underweight position which hampered performance the most was Vonovia (+10.8%) but this was more than offset by the overweight position in TAG. However, there was no natural hedge for the (initial) underweight exposure to Merlin Properties (+33.2%) which saw supercharged performance driven by its data centre development programme. We were slow to appreciate how positively the market would treat absolutely any artificial intelligence ('AI')-related exposure - even as a small part of a fully diversified portfolio including offices, shopping centres, logistics and residential. We closed the underweight position over July and August (buying at an average of €12.26 per share) with the stock ending the period at €13.76 per share. This is a prime example of the importance of accepting a change in market sentiment and taking corrective action, rather than remaining dogmatic about a previous valuation of future development gains. However, we remain wary of extended exuberance in this stock.

The final 'mea culpa' for the period was our underexposure to London offices. Whilst we noted in last year's half year and annual reports the rapid recovery in prime rents in the very best locations, the performance of the developer names Great Portland Estates, Derwent London and Helical was very weak, touching decade-low pricing in March this year. Our view at the time - which still holds - is that none of these companies have enough best-in-class new development opportunities to meaningfully 'move the needle' and their cash earnings (after reversing out capitalised interest) remain very low. We simply prefer our companies to have stronger cash earnings. However, investor sentiment towards those companies has improved markedly in the last six months. We believe this is at least partly based on the potential for privatisation given the deep discounts that they trade at. We continue to prefer Workspace (+0.2%) where new management is getting to grips with the historic underinvestment in operational systems, particularly in understanding tenants' occupational intentions. The deep discount to asset value has attracted several well-known discount arbitrageurs who also see the virtue of a management turnaround.

Offices

Central London continues to report record rents for new-build offices in the very best-in-class locations, particularly those close to Elizabeth Line stations. It is hard to overestimate the attraction of proximity to this new infrastructure. However, we remain cautious about sub-markets which do not have this benefit. At the time of writing, the UK economy remains very subdued, with corporates in 'wait-and-see' mode ahead of the Autumn Budget in late November, which will coincide with the publication of this report. We believe this particularly affects hiring in small and medium-sized enterprises ('SMEs') as well as at entry- and graduate-level more broadly. But even though headcount growth is subdued, the return to office continues to gather momentum, with more businesses adopting a policy of at least four days per week in the office. The public sector remains far behind in requiring more time in the office.

Paris, our second largest office market exposure, showed a similar pattern, with top performance concentrated in super-prime assets located in core CBD markets. Rental growth was lower than London and lease incentives continued to rise for all but the very best assets.

Peripheral but important sub-markets dominated by financially focused businesses such as Canary Wharf and La Defense continue to see little rental growth given elevated vacancy levels. Although take up in Paris CBD fell 15% year-on-year, Savills notes that this was due to a shortage of new supply, rather than falling demand. A clearer comparison is that vacancy in Paris CBD is less than 6%, while La Defense is still recording more than 15%. The same report notes a strengthening of demand from tenants looking to satisfy ESG credentials by occupying energy efficient and 'energy intelligent' buildings. The cautious approach which we suspect is prevalent in UK business leaders' minds could equally be applied to their French equivalents.

Smaller markets, particularly in Germany (which has no single overly dominant office market), have seen a much wider range of performance, with Frankfurt and Cologne enjoying 10% rental growth whilst Berlin and Munich recorded increases in incentive packages to attract tenants. All this data reminds us that real estate is a local business and blanket assumptions about national absorption rates are rarely useful.

Even with this mixed occupational picture, the investment market for offices continues to recover, with European investment volumes for offices reaching €20bn for the first half of 2025. This is 11% ahead of the prior period but still some way behind the five year average. It also constitutes only 25% of all investment in the period. The 10-year average was 39%, so trading in the asset class remains well below long term norms, however it is clear that institutional capital is gradually re-emerging for this sector. Yields compressed very slightly (5bps) in the first half but that compares very favourably to the 150bps expansion since the beginning of 2022. There is definitely evidence of price stability for the right asset.

Retail

Shopping centre focused property companies have continued to be star performers in our universe. The mixture of high earnings yields, stable income and low vacancies for the most dominant malls remains an attractive proposition. The underlying asset class has clearly found some equilibrium following the dramatic decade-and-a-half of retailer retrenchment from physical units, which started (in earnest) post the introduction of the iPhone in 2010 and the revolution of mobile access to internet purchasing.

Online sales as a percentage of total sales continue to grow but at much more modest rates than previously reported, particularly in the most mature markets such as the UK. According to AEW, e-commerce penetration rates are expected to reach 20% of all sales by 2029. The current figure for Europe (ex UK) is 16%.

Retailers want us to shop in store, or at least use 'click and collect', as online fulfilment (including returns) offer the lowest retailer margin. Retailers are therefore willing to spend more on the locations where they want a physical presence and this is reflected in rental growth statistics. The overall rate of growth remains positive, but modest, at 1-2% per annum, but with hotspots in tourist locations. Retail warehousing has become a real 'sector du jour' recording historically low vacancy levels as retailers (and customers) remain attracted to the ease of 'click and collect' and 'click and return' as part of an omni-channel retail journey. Retail warehousing vacancy levels are at 2% across Europe, the lowest level since 2014.

According to BNP Paribas, retail investment volume reached €18bn in the first half of 2025, an increase of 15% year-on-year and representing 23% of total investment volume. Importantly, this share of total investment is now ahead of the ten year average. Outlets have seen elevated transaction volumes with Savills expecting investment volumes to breach €1bn in 2025. Retailers continue to be attracted to outlets given the leasing convention of low base rents melded with a share of turnover. The alignment between landlord and tenant to deliver the best customer experience has seen the most dominant outlet malls thrive across Europe.

Industrial and Logistics 

The pattern of slowing rental growth which the industrial sector has experienced across almost all pan-European markets has continued as vacancy levels rise. To be clear, rental growth is still positive but significantly below the elevated growth rates seen in 2020-2023. Jones Lang LaSalle ('JLL') note that prime logistics rents increased by 1-2% in the first half of 2025 after recording +4% in 2024 and +10% in 2023.

European logistics take-up continued to decline quarter-on-quarter, resulting in a fall of 16% year-on-year. This ranks as one of the weakest quarters since 2015 as so many businesses try to navigate the impact of the, frankly fluid, US tariff environment. Vacancy across Europe reached 6.7% in the first half of 2025, ahead of the long run average of 5.5%. As with all average figures, they mask wide divergence and investors continue to hold prime assets. Savills note that after 120bps of yield expansion since the end of 2022, prime yields have stabilised at 5.2%, with Stockholm an outlier recording 10bps of compression in the first half.

Supply has responded quickly, with Cushman recording a 30% drop in logistics construction from the recent peak in the second quarter of 2022. This is very encouraging and, coupled with recent stabilisation in demand as corporates are increasingly able to model their post tariff requirements, we remain increasingly positive towards the sector. Demand can change quickly and a recent report from Savills noted a drop in take up of 30% in the UK in the aftermath of Brexit in 2017 only to rebound 41% in 2018.

Residential

The private rental sector ('PRS') remains the sector most sensitive to bond yields, particularly where rents are heavily regulated such as Germany and Sweden, where rental levels can be up to 40% below open market equivalents. The extreme imbalance of supply and demand is compounded by this regulation which discourages investors from providing more supply. This issue has been compounded by a rising cost of construction which makes margins even skinnier. The result was an 11% drop in annual permitting for new developments between 2020 and 2024.

Whilst new supply can initially attract open market rental levels, thereafter they are subject to below inflation growth rates. It is the most extreme example of the 'haves' (those with a flat) and the 'have nots' (the multi-year waiting lists). With rents so far below, open market behaviour becomes skewed as tenants are unwilling to move even when their accommodation is no longer suitable. For investors, the opportunity is the ability to buy into extremely secure rental streams which have a sub-inflation growth outlook, except where you can drive rental growth through capital expenditure or capital growth through unit sales.

With base rates marching downwards, European multi-family prime yields have stabilised at 4.2%, with German prime yields at 3.4% across the seven largest cities. JLL tracks yields across 24 European markets and the range is 3.2% (Munich) up to 5.3% in Warsaw. We do not expect further yield expansion because open market rents are rising and this does drag up regulated rents where there is an element of open market pricing capture.

The major issue remains the lack of large-scale demand from institutional buyers. Large scale (more than €200m) deals continue to be a rarity, accounting for just 16% of all deals, as opposed to 27% in the first half of 2024. The best live example of this phenomena is in the UK where the board of PRS REIT (a small cap, multi-family portfolio) invited bids for the company. After an extensive marketing campaign, the best offer equated to 115p per share, well below the last published asset value of over 140p per share. The difference is that the bid is for all £1.3bn of gross assets as a single deal, whilst the independent valuation assumes a break-up of the portfolio into multiple packages. In our view the board should have clarified to the market that the published NAV (the higher figure) had an important caveat in its assessment of market value, i.e. the valuation assumes a break-up. The 'discount for size' is therefore nearly 18% based on the current potential offer and reflects the lack of demand for large scale residential portfolios.

Alternatives

This loose collective of all sectors which do not fall into either office, retail, industrial/logistics or residential is now a very significant component of our investment universe. It mainly encompasses primary healthcare, nursing homes/senior living, student accommodation and self-storage. All very different sub-sectors in their own right.

Healthcare, both in the UK and Europe has been busy, not only at the corporate level (PHP/Assura and CareTrust acquiring Care REIT), but also at the property level with Knight Frank expecting a record transaction volume of £12bn for 2025, well ahead of the 5-year average of £2.4bn. US investors have been busy with the acquisition of Hartford Care (£100m) by Foundation Partners as an example beyond CareTrust's £448m acquisition of Care REIT. Investors are clearly attracted not only to primary healthcare facilities with government backed income, but also elderly care assets where tenants are private businesses, albeit with varying levels of indirect state income. In Europe, the largest deal of the year was the takeover of Cofinimmo by Aedifica to create a €6bn market cap business. Some care home operators, particularly in Europe, have continued to resolve their balance sheet issues with portfolio sales. These include sales by Clariane (previously Korian), Emeis (Orpea) and Premonial.

Self-storage is always seen as one of the more economically sensitive sectors given that customer contracts have rolling four week notice periods. The rise in interest rates reduced business confidence and residential transaction volumes. This impacted on performance, culminating in the operators reducing rate growth to support occupancy, which hit share prices hard from 2022 to late 2024. This year has seen investor sentiment become more positive, particularly since September, with the announcement that the board of Big Yellow is investigating the possible sale of the company.

The poorest performing alternatives sub-sector over the period was purpose-built student accommodation ('PBSA'). Unite (-7.5%) had been the poster child of stable long-term earnings growth but the new CEO (previously CFO) surprised investors with the acquisition (through a mix of cash and paper) of post-graduate focused Empiric Student Property. There is more on this subject in the Investment Activity section of this report. Unite's subsequent announcement (in October) that it had failed to reach its own guidance of 97% occupancy for the academic year 2025/6, having only reiterated that expectation a couple of weeks earlier, sent shock waves through the equity market's (too) rosy outlook for PBSA. The message is clear. There is a growing cohort of students choosing to study closer to home because of accommodation costs. In addition, recent visa changes are continuing to affect many overseas students, and there is a rising concern that more school leavers are questioning the financial value of attending university given the debts that can take years to repay.

Debt and Equity Markets

One of the key underpins of our optimism towards the real estate equity sector has been both the availability of debt and the improving competition amongst lenders. The Euro-denominated bond market has been equally conducive with issuance of €18bn in the first half of 2025. ING estimates that total issuance for the year will be over €30bn, only €6bn short of the 2021 record of €36bn. The pace of issuance has also accelerated, from €4bn in May to over €6bn in September.

The credit rating agencies also helped funding conditions by becoming more positive on the sector at a time of tightening spreads. Alongside multiple refinancings, we have seen very positive maiden issuance from the likes of Colonial, with an €800m unsecured six-year at spread of just 92bps, and WDP's unsecured €500m, five-year at an impressive 80bps spread and an all-in coupon of 3.175%. Borrowing at these levels is clearly helping drive earnings. The bond market is attracted to the combination of portfolio quality and low overall loan-to-value levels of so many of our listed companies.

In comparison, equity issuance has been much more muted, with the only sizeable capital raises in the period from TAG (€186m) to acquire more of their Polish joint venture and Hammerson (£140m) to acquire the 50% that they did not own in the Bullring and Grand Central in Birmingham. In Sweden, we saw two modest capital raises from Cibus (€91m) to acquire more supermarkets and Corem (€85m) to continue their required de-gearing.

Investment Activity 

Portfolio turnover (purchases and sales divided by two) in the first six months totalled £290m. Given average net assets of £1.11bn, this equated to turnover of 26%. This was broadly in line with the equivalent last year, which was 22%. Please note that this is turnover for six months versus total net assets and hence the full year figure will be commensurately higher.

The adjustments in our largest overweight and underweight positions (versus their respective weights in the benchmark) were as follows. In the German residential space, we continued to add to TAG, participating in the capital raise when they acquired more assets in Poland. We remain very optimistic about growth in the Polish business, both 'build-to-rent' and 'build-to-sell'. With long Bund yields stable, we have also reduced the underweight position in Vonovia (from over 5% to under 3.5%). As the largest and most liquid real estate equity name in Europe, it remains the easiest way for generalist investors to express any renewed conviction if bund yields continue to tighten. Our other most significant position in this sector is Phoenix Spree Deutschland (2.7% of net assets), where we are hopeful that a game-changing debt restructure will be announced in the next month or so. This would allow the company to begin the process of returning capital to shareholders given that it has successfully initiated the planned process of selling flats in Berlin (either to existing tenants or once they become vacant). Berlin remains, by some margin, the cheapest residential market of any European capital.

Other overweight positions which have been reduced towards neutral include Klepierre and Gecina, the former following a period of excellent outperformance and the latter on concerns around the Paris office market. Overlaying all of our French positions is our growing concern about the country's governance structure and the inability to pass a Budget, without which consumers and corporates cannot have clarity on the economic outlook.

Unite has also been discussed earlier in the report. Having halved the overweight position by selling at 850p per share, we paused given the 10% correction to that price. Little did we foresee that the management team's missteps would see the share price at 585p at the end of October. Down at this price we are holding an equal weight position.

Our new tenth largest relative holding is Irish Residential Properties REIT (1.5% of assets). We are positive about the Irish government's sensible conclusion that capping rents below market value just results in no new development. Dublin is crying out for more supply and therefore enabling developers to make sensible returns given the risk of planning, construction and leasing is common sense. If only other city governing bodies (such as the Mayor and the Government Office for London) would take note of the Irish approach.

Earlier in the report I mentioned Merlin, which was a significant underweight at the end of March, but this negative position has been entirely closed and we now hold a small overweight position. Merlin remains the only viable way to get exposure to data centres with developments in Spain and Portugal. Segro has some exposure but it is very modest in the context of the whole portfolio.

Between the two UK majors, we switched our overweight in Landsec into British Land. Landsec announced their intention to sell out of a significant part of their mature London office portfolio alongside several development sites. We applaud that decision; our issue is that they intend to rotate the capital into their PRS platform. This is an entirely new area for management and a market dominated by the need for scale, alongside a sophisticated operating platform to manage business-to-consumer relationships on relatively short-term contracts. In the summer, we got the distinct feeling that management had listened to shareholders (and the share price) and realised that this was not received well by the market. British Land has 25% of its assets in retail warehouses, the sector with the highest five-year compound annual growth rate forecast.

At the country level, our largest underweight positions were in Sweden, where we were concerned about the refinancing risk of these higher leveraged businesses, alongside seeking minimal exposure to Stockholm and Gothenburg offices, where we see plenty of new supply. The other regional trade which generated alpha was the underweight exposure to Switzerland. Traditionally a safe haven, these performed well in the initial aftermath of 'Liberation Day' and the tariff turmoil, only to underperform later in the period as the outlook stabilised.

Our UK small cap portfolio saw exits from Warehouse REIT following the bid from Blackstone and PRS REIT where the board has indicated that a bid from a consortium of local authority pension funds is acceptable. In the case of the latter, I have chosen to recycle the capital, taking a price slightly below the bid (112p) in October but ahead of our average acquisition price of 104p in July and September. In the case of Urban Logistics REIT we took LondonMetric paper.

Physical Property Portfolio

The physical property portfolio produced a total return of +2.8%, made up of a capital return of +0.9% and an income return of +1.9%.  Following completion of phase two of our rolling refurbishment at Ferrier Street in Wandsworth, we have let one unit to an existing tenant on the estate on a ten year lease. We have now refurbished five units (out of 16) and let three of them. Whilst take up has been a little slower than we would have liked, we have good interest in the remaining two units from a wide range of occupiers.  In addition to this letting, we have extended leases on three other units in order to maintain income in a market where decisions are taking longer. In Gloucester, we have facilitated the assignment of two leases to Supreme Imports for them to package Typhoo Tea following their acquisition of the brand. Supreme are an exciting business with a stable of consumer facing brands and we are delighted to welcome them to the estate. 

In accordance with the RICS UK Valuation Standards, the Company has implemented a mandatory change of valuer following the completion of a nine year consecutive appointment period by Knight Frank. This rotation supports the Company's commitment to maintaining best-in-class governance and valuation independence, ensuring continued compliance with evolving regulatory standards. JLL has been appointed following a competitive selection process, offering relevant sector expertise and robust valuation capabilities.

Revenue and Revenue Outlook

The first half earnings of 10.07p are some 23% ahead of the prior year. As anticipated in the 2025 Annual Report, we are seeing the benefit of the resumption of distributions where companies had paused dividends (following the rapid interest rate increase in late 2022), together with steady increases in distribution rates generally. Coupled with this, our real estate investments during the last financial year produced a meaningful increase in net rental income.

Our earnings are usually skewed to the first half of the financial year and we do not expect that to change. The rate of increase for the second half will be less marked since many of the companies who had paused distributions in the 2023/24 financial year and beyond had, in the main, recommenced payment in the second half of the last financial year. Any increase in the second half earnings will therefore largely be driven by growth in distribution rates, so will be modest compared to the first half growth.

The Board has announced a 1.8% increase in the interim dividend. It has not been increased over the last two financial years, therefore the gap between the interim and final dividend has widened and the Board is seeking to begin to redress this. As set out above, earnings growth in the second half is not expected to match that in the first half. For both these reasons shareholders should not take the increase in the level of the interim dividend as an indicator of the level of growth for the final dividend.

As the Chairman has set out in her statement, although we expect to see a healthy improvement in our earnings for the full year, we still expect to make a small contribution from our revenue reserves to cover the full year distribution.

Looking forward, although we are comfortable with the prospects for rental growth and expect to see this feeding through into company dividends, we do not expect interest rates to fall as fast and far as once hoped and this will continue to impact the earnings of the companies we receive dividends from and, also, through our on-balance sheet borrowings, our own interest costs. With that headwind, growth back to our record levels of earnings (in the financial year to 31 March 2023) will be steady and modest contributions from our retained earnings may be required in the medium term to keep moving forward the dividend to our own shareholders.

Gearing and Debt

Our €50m loan note matures in February 2026. We are currently in discussion with a number of potential debt providers about the potential refinancing of this. Although the appetite for funding is currently much healthier than it has been over the last few years, underlying interest rates have moved up markedly from the historic lows which prevailed when the Euro loan note was taken out almost ten years ago and we will inevitably see an increase in our overall financing rate.

Gearing over the period has remained relatively constant at around 18%. The positive return over the period has vindicated that decision and the level of gearing as we enter the second half of our financial year indicates our continued optimism for our sector.

Outlook

In the Outlook section of my annual report written in May 2025 I referenced our high level of gearing and general sense of optimism. This might have seemed heroic at the time given the poor performance of real estate equities in the second half of the last financial year. However, we felt strongly that the mix of market fundamentals (supply/demand disequilibrium for prime assets in all sectors) and the historically low valuation of the listed sector (no one seems to want to own the ultimate 'value' equity) were together compelling underpins. Whilst it is pleasing to report a shareholder total return of +12.4% for the first six months of the financial year, the ongoing lack of enthusiasm for the sector by generalist investors has resulted in only a modest narrowing of discounts and this, in our view, presents further upside from here, particularly if the cost of borrowing continues to fall.

The potential for earnings to grow, not only at the top line through market rental growth but also through lower cost of debt, is an important underpin for the next stage of this cycle. Our listed companies have balance sheet resilience and (in the main) high quality portfolios. Private capital continues to circle, providing another valuation underpin. Consolidation (or privatisation) amongst our smallest companies is almost at an end but the elongated process has been cathartic. We are confident that the outcome will be viewed positively, with a smaller number of more efficient businesses providing greater liquidity and driven by management teams aligned with shareholders.

Marcus Phayre-Mudge

Fund Manager

1 December 2025

Investment portfolio by country

as at 30 September 2025

Notes

>         Companies shown by country of listing.

>         The above positions are the physical holdings included in the investments held at fair value in the Balance Sheet. The CFD positions are the net of the profit or loss on the CFD contracts (i.e. not the investment exposure) included in the Balance Sheet current assets and liabilities.

Group statement of comprehensive income

The Total column of this statement represents the Group's Statement of Comprehensive Income, prepared in accordance with UK-adopted International Accounting Standards. The Revenue Return and Capital Return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

The Group does not have any other income or expense that is not included in the above statement therefore "Total comprehensive income" is also the profit for the period.

As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The net profit loss after taxation of the Company dealt with in the accounts of the Group was £109,328,000 profit (30 September 2024: £117,913,000 profit; 31 March 2025: £27,441,000 loss).

All income is attributable to the shareholders of the parent company.

Group statement of changes in equity

Group balance sheet

Group cash flow statement

Notes to the financial statements

1 Accounting policies

The accounting policies applied for these half year financial statements are consistent with those applied in the financial statements of the Company's most recent annual report. The statements have been prepared on a going concern basis, in accordance with UK-adopted international accounting standards and in conformity with the requirements of the Companies Act 2006. The financial statements have also been prepared in accordance with the Association of Investment Companies Statement of Recommended Practice, "Financial Statements of Investment Trust Companies and Venture Capital Trusts," ('SORP'), to the extent that it is consistent with UK-adopted international accounting standards.                       

The financial statements are expressed in sterling, which is the Company's functional and presentational currency. Sterling is the functional currency as it is the currency of the primary economic environment in which the Group operates.                                 

In assessing Going Concern the Board has made a detailed assessment of the ability of the Company and the Group to meet its liabilities as they fall due, including stress and liquidity tests which considered the effects of substantial falls in investment valuations, revenues received and market liquidity as the global economy continues to suffer from geopolitical and economic pressures.                                                                    

In accordance with IFRS10 the Company has been designated as an investment entity on the basis that:                              

•    it obtains funds from investors and provides those investors with investment management services;                      

•    it commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation and investment income; and                                                                       

•    it measures and evaluates performance of substantially all its investments on a fair value basis.                                                           

Each of the subsidiaries of the Company was established for the sole purpose of operating or supporting the investment operations of the Company (including raising additional financing) and is not itself an investment entity. IFRS 10 sets out that in the case of controlled entities that support the investment activity of the investment entity, those entities should be consolidated rather than presented as investments at fair value. Accordingly, the Company has consolidated the results and financial positions of those subsidiaries.                                                                      

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of subsidiaries used in the preparation of the consolidated financial statements are based on consistent accounting policies. All intra-group balances and transactions, including unrealised profits arising therefrom, are eliminated.                                                                       

The standards issued before the reporting date that become effective after 30 September 2025 are not expected to have a material effect on equity or profit for the subsequent period. The Group has not early‑adopted any new UK-adopted international accounting standards or interpretations. Standards, amendments and interpretations issued but not yet effective up to the date of issuance of the Group's financial statements are listed below:                                                                    

IFRS 18 Presentation and Disclosure in Financial Statements (effective date 1 January 2027): the amendments specify the requirements to provide investors with more transparent and comparable information about companies' financial performance. The amendments are not expected to have a material impact on the Group's financial statements.

2 Management and performance fees

Under the terms of the management agreement the Manager is not entitled to a performance fee based on the net assets at 30 September 2025 (30 September 2024 - £1,536,000, 31 March 2025 - £644,000). Any payment is not due until the full year performance fee is calculated at 31 March 2026.

A summary of the terms of the management agreement is given in the Report of the Management Engagement Committee on pages 56 and 57 of the latest annual report.

With effect from 1 April 2025, 80% of the Company's management fee and finance costs are allocated to the capital account and 20% to the revenue account (prior to 1 April 2025: 75% to capital and 25% to revenue).

3 Earnings/(loss) per share

The Group has no securities in issue that could dilute the earnings per ordinary share. Therefore the basic and diluted earnings per ordinary share are the same.

4 Dividends

The final dividend of 10.25p (2024: 10.05p) in respect of the year ended 31 March 2025 was declared on 10 June 2025 and paid on 30 July 2025. This can be found in the Group Statement of changes in equity for the half year ended 30 September 2025 in the Half Year Report.

The interim dividend of 5.75p (2025: 5.65p) in respect of the year ending 31 March 2026 was declared on 1 December 2025 and will be paid on 8 January 2026 to all shareholders on the register on 12 December 2025. The shares will be quoted ex-dividend on 11 December 2025.

The interim dividend has not been included as a liability in these interim financial statements in accordance with IAS 10 "Events after the reporting period".

5 Investments held at fair value

Financial assets and financial liabilities are carried in the Balance Sheet either at their fair value (investments) or the balance sheet amount is a reasonable approximation of fair value (due from brokers, dividends and interest receivable, due to brokers, accruals and cash at bank).

Fair value hierarchy disclosures

The table below sets out fair value measurements using IFRS 13 fair value hierarchy, including investment properties to show the fair value level of the complete investment portfolio:

Financial assets/(liabilities) at fair value through profit or loss

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:

       
Level 1 - quoted (unadjusted) prices in active markets for identical assets or liabilities, including investments listed on recognised exchanges.

       
Level 2 - other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly, including forward foreign exchange trades, contracts for difference, and equity investments with no recent trading history.

       
Level 3 - techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data, including direct property and unlisted investments.

Contracts for Difference are synthetic equities and are valued by reference to the investments' underlying market values.

There were no transfers during the half year between any of the levels.

Investment properties are carried by the Group at fair value in accordance with IFRS 13, revalued twice a year, with changes in fair values being recognised in the Group Statement of Comprehensive Income. The Group engaged Knight Frank LLP as independent valuation specialists to determine fair value as at 30 September 2025. Determination of the fair value of investment properties has been prepared on the basis defined by the RICS Valuation - Global Standards (The Red Book Global Standards) as follows:

       
"The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion."

       
The valuation takes into account future cash flow from assets (such as lettings, tenants' profile, future revenue streams, capital values of fixtures and fittings plant and machinery, any environmental matters and the overall repair and condition of the property) and discount rates applicable to those assets. These assumptions are based on local market conditions existing at the balance sheet date.

       
In arriving at their estimates of fair values as at 30 September 2025, the valuers have used their market knowledge and professional judgement and have not only relied solely on historical transactional comparables.

Reconciliation of movements in financial assets categorised as level 3 for the half year ended 30 September 2025

The Group has no unlisted investments as at 30 September 2025, see the Investment Portfolio information in the Half Year Report for details.  During the half year, the final liquidation proceeds of £67,000 were received for Ediston Property.

All appreciation/(depreciation) as stated above relates to movements in fair value of unlisted equity investments and investment properties held at 30 September 2025.

Sensitivity information for investment property valuations

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy of investment properties are:

Significant increases (decreases) in estimated rental value and rent growth in isolation would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in long-term vacancy rate in isolation would result in a significantly lower (higher) fair value measurement.

6 Borrowings

Loan notes

On the 10th February 2016, the Company issued 1.92% Unsecured Euro 50,000,000 Loan Notes and 3.59% Unsecured GBP 15,000,000 Loan Notes which are due to be redeemed at par on the 10th February 2026 and 10th February 2031 respectively.

At the Balance Sheet date the fair value of the 1.92% Euro Loan Notes was £43,640,000 (30 September 2024: £42,067,000; 31 March 2025: £41,843,000) and the 3.59% GBP Loan Notes was £14,301,000 (30 September 2024: £14,320,000; 31 March 2025: £14,286,000) and are deemed to be categorised within Level 2 of the IFRS 13 fair value hierarchy.

The loan notes agreement requires compliance with a set of financial covenants as shown in note 11.7 of the 2025 Annual Report. These covenants have all been complied with during the half year ended 30 September 2025.

Multi-currency revolving loan facilities

The Group also has unsecured, multi-currency, revolving short-term loan facilities totalling £90,000,000 (30 September 2024: £60,000,000; 31 March 2025: £90,000,000). At the balance sheet date, £83,787,000 was drawn on these facilities (30 September 2024: £59,136,000; 31 March 2025: £66,948,000). The covenants for these facilities have all been met during the period.

Reconciliation of liabilities arising from financing activities

7 Called-up share capital

As at 30 September 2025, 317,350,980 ordinary shares of 25p nominal value were in issue (30 September 2024: 317,350,980; 31 March 2025: 317,350,980). During the period, the Company made no market purchases of ordinary shares of 25p each for cancellation or to be held in treasury. Since 30 September 2025 no ordinary shares have been purchased for cancellation or to be held in treasury.

8 Net Asset Value per ordinary share

9 Going concern

The Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements. The assets of the Company consist mainly of securities that are readily realisable and, accordingly, they believe that the Company has adequate financial resources to meet its liabilities as and when they fall due and continue in operational existence for a period of at least 12 months from the date of approval of this Half Year Report.

10 Comparative Information

The financial information contained in this Half Year Report does not constitute statutory accounts as defined in section 435(1) of the Companies Act 2006. The financial information for the half year periods ended 30 September 2025 and 30 September 2024 has not been audited or reviewed by the Company's auditors. The figures and financial information for the year ended 31 March 2025 are an extract from the latest published financial statements and do not constitute statutory financial statements for that year. Those financial statements have been delivered to the Registrar of Companies and include the report of the auditors, which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

Directors' Responsibility Statement in respect of the Half Year Report

Principal and Emerging Risks

The Principal and Emerging Risks facing the Company have not changed since the date of the Annual Report 2025 and continue to be as set out in that report.

The Principal and Emerging Risks facing the Company include, but are not limited to, poor share price performance in comparison to the underlying NAV; poor investment performance of the portfolio relative to the benchmark; market and geopolitical risk; the Company is unable to maintain dividend growth; accounting and operational risks; financial risks; loss of Investment Trust status; legal, regulatory and reporting risks; inappropriate use of gearing, other financial risks and personnel changes at the Investment Manager. An explanation of these risks and how they are managed are set out on pages 36 to 39 of the Annual Report for the year ended 31 March 2025 (which can be found on the Company's website www.trproperty.com).

Going Concern

As stated in note 9 above, the Directors are satisfied that the Group has sufficient resources to continue in operation for a period of at least 12 months from the date of this report. Accordingly, the going concern basis has been adopted in preparing the condensed financial statements.

Directors' Responsibility Statement

In accordance with Chapter 4 of the Disclosure Guidance and Transparency Rules, the Directors confirm that to the best of their knowledge:

·   the condensed set of financial statements has been prepared in accordance with applicable UK Accounting Standards on a going concern basis and gives a true and fair view of the assets, liabilities, financial position and net return of the Company;

·   this half year report includes a fair review of the important events that have occurred during the first six months of the financial year and their impact on the financial statements;

·   the statement of Principal and Emerging Risks shown opposite is a fair review of the Principal and Emerging Risks for the remainder of the financial year; and

·   this half year report includes a fair review of the related party transactions that have taken place in the first six months of the financial year.

On behalf of the Board

Kate Bolsover

Chairman

1 December 2025

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

By order of the Board

Columbia Threadneedle Investment Business Limited

Company Secretary,

1 December 2025

ENDS

A copy of the Half Year Report will be submitted to the National Storage Mechanism and will shortly be available for inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism.

The Half Year Report will also be available shortly on the Company's website at www.trproperty.com where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

For further information please contact:

Marcus Phayre-Mudge

Fund Manager, TR Property Investment Trust plc

020 7011 4711

Mark Young

Stifel 

020 7710 7633

Tom Scrivens

Panmure Gordon (UK) Limited 

020 7886 2648