Stoneweg Europe Stapled Trust DPS falls 7% to 0.06553 euro for H1 amid higher interest expenses

[SINGAPORE] Stoneweg Europe Stapled Trust (Sert) on Wednesday (Aug 13) posted a distribution per stapled security (DPS) of 0.06553 euro for its first half ended Jun 30, 2025, 7 per cent down from a DPS of 0.0705 euro in the year-ago period.

The stapled group’s lower DPS was “in line with market expectations” and a reflection of higher interest expenses in the current rate environment, said Simon Garing, the chief executive of its managers.

For the six months, its distributable income fell 7.3 per cent to 36.7 million euros (S$55 million), from 39.6 million euros in H1 2024, mainly driven by a 23.9 per cent hike in net interest costs. This was due to higher all-in interest rates and higher borrowings following the January issuance of a 500 million euro six-year green bond, the managers said.

Its net property income (NPI) inched up 2.2 per cent to 66.9 million euros, from 65.5 million euros previously.

H1 revenue rose marginally by 1.1 per cent on the year to 107.4 million euros from 106.3 million euros.

The improvements to NPI and revenue were driven by strong growth in the logistics/light industrial sector. Higher income from redeveloped properties in Milan – Nervesa21 and Via dell’Industria 18 – also contributed to the gains.

Notably, Sert in late June made a 50 million euro investment into AiOnX – the sponsor’s fund, comprising hyperscale data centre development projects in five locations. The managers said that the investment, which was recorded at fair value of 74.8 million euros, resulted in a 49.6 per cent valuation upside.

Sert’s portfolio occupancy stood at 92.4 per cent, 1.2 per cent lower than H1 2024.

Its weighted average lease expiry stood at 5.1 years, 0.3 year longer than in the year-ago period.

Weighted average debt to maturity was 3.8 years, amid the issuance of the 500 million euro six-year green bond in January, which extended Sert’s debt expiry profile.

Net gearing rose to 41.8 per cent, 1.6 percentage points higher compared with Dec 31, 2024.

Looking ahead, the managers noted that in the event that increased tariffs slow economic activity in the short to medium term, European central banks could respond with rate cuts. This could potentially accelerate real asset yield compression, the managers said.

Garing said that the stapled group would continue to focus on disciplined capital management and active asset management.

Stapled securities of Sert finished Tuesday 0.4 per cent or S$0.01 higher at S$2.40.