Over the course of October 2025, the NAV of the Fund increased by 1.8% (A Acc GBP), underperforming the UK Real Estate Index*, which increased by 3.1%. Since its launch, the Fund has increased by 0.9% (A Acc GBP), outperforming the UK Real Estate Index* which has fallen by 18.6% in the same period.

The strategy of the Fund is to invest in a diversified portfolio of thematic real assets. The Fund’s 22 investments are set to benefit from four socio-economic mega trends: ageing population (14.6% portfolio weight), digitalisation (27.3% portfolio weight), generation rent (20.2% portfolio weight), and urbanisation (13.2% portfolio weight). It will also invest in REITs with assets that encompass more than one of these trends (24.4% portfolio weight).

Within each mega trend, the Fund Manager undertakes fundamental research to identify the most attractive investment opportunities. Combining top-down analysis of socio-economic mega trends with bottom-up fundamental research has yielded good results for the Fund.

October was a good month for the UK-listed real estate sector. The digitalisation sub-sector performed the best, delivering 6.7%**. Multi-theme assets, urbanisation and ageing population were next, returning 2.9%**, 1.7%** and 1.4%** respectively. Generation rent fell by 8.9%**.

In October, investors responded positively to a dovish Bank of England (BoE) stance, despite persistent inflation and a challenging fiscal outlook. The BoE’s dovish signals led to a rally in the price of gilts, and a fall of around 4.5% on the 10-year yield, which is the largest monthly drop since December 2023. The Consumer Price Index inflation held at 3.8%, keeping pressure on the BoE, while economic growth remained subdued. Fiscal concerns were prominent, with government borrowing reaching nearly £100 billion for the first half of the financial year, which is the highest since the pandemic. This has increased expectations that the Chancellor of the Exchequer will implement significant tax hikes or spending cuts in the November Budget.

M&A activity continued into October, with Empiric (portfolio weight 3.1%) shareholders voting in favour of Unite’s (portfolio weight 3.9%) cash and shares offer, although the deal is conditional on approval from the Competition and Markets Authority (CMA), which could take until the end of H1 2026. Both companies recently published weaker-than-expected trading updates, with occupancy falling short of expectations. That said, we believe the long-term structural tailwinds, namely the strength of the UK’s universities and the ongoing shortage of high-quality purpose-build student accommodation, remain in place.

The CMA approved the merger of Assura and PHP (portfolio weight 7.7%) in October, meaning that PHP can start to integrate the two businesses. LondonMetric (portfolio weight 6.4%), which already made two acquisitions in 2025, announced it has built a c. 9.5% stake in Schroder REIT (portfolio weight 5.4%). Saba Capital, the activist investor, increased its stake in Workspace (portfolio weight 3.5%) from 5% to 10%, although they have not explained the rationale for this investment. During the month Workspace published a trading update, with rates stable despite a decline in occupancy. After losing out on Warehouse REIT over the summer to Blackstone, Tritax Big Box (portfolio weight 7.6%) announced the acquisition of a c. £1bn portfolio of logistics assets from Blackstone, which it will fund with cash and shares. As a result, Blackstone has become a c. 9% shareholder in Tritax Big Box. Finally, according to Green Street News, Big Yellow (portfolio weight 4.7%) has appointed bankers to tap investor interest in the company. Blackstone issued an RNS shortly after this article was published confirming its interest, although did not provide any details on potential pricing.

In the ageing population mega trend, Target Healthcare (portfolio weight 6.9%), released positive results in October, announcing EPRA NTA growth of 3.7%, along with portfolio growth of 2.4%. Alison Fyfe, Chair, provided a positive outlook for company: “Despite the challenging market backdrop for real estate, our portfolio continues to consist of future-proofed, best-in-class real estate in a defensive asset class supported by compelling long-term demographic tailwinds. This leaves the portfolio well-positioned, with the Group ready to act nimbly to take advantage of any opportunities that the uncertain market conditions may present.”

The Fund Manager remains optimistic about the Fund’s performance with continued M&A activity, along with the strong underlying performance of portfolio assets and confidence in the mega trends.Investors should look to the attractive, growing dividend yield and the potential for further upside, with the Fund continuing to invest in defensive, domestic and dependable assets. While growth concerns continue to impact capital markets, the four socio-economic mega trends - ageing population, digitalisation, generation rent and urbanisation - are set to gain.

*MSCI UK IMI Core Real Estate Net Total Return GBP.
**Defined as the calendar month, as opposed to the valuation month.