UK-listed property shares gave back some of July’s gains in August, with the average share price falling 2.2%. Only a handful of companies recorded gains, with the median return a more modest 1.3% decline. The headline average is distorted by a number of large corporate actions. Residential Secure Income (RESI) fell 70.5% during the month as it began returning capital to shareholders following the disposal of its retirement portfolio.

Excluding RESI, the average fall was 0.9%. The sector remains up 1.4% on average over three months, but is still 5.9% below its level a year ago and down 6.2% so far in 2026.

Best performers in price terms

Source: Bloomberg, Marten & Co

Harworth Group (HWG) was August’s runaway winner, rising 35.6% as the land and property regeneration business became the latest UK-listed property company to attract takeover interest. Peel Holdings, already Harworth’s largest shareholder with almost 30%, launched a 172.5p per share cash offer on 6 August, valuing the company at about £583m and representing a 36% premium to Harworth’s three-month volume-weighted average price. Harworth’s board rejected the proposal, arguing that it fundamentally undervalued the company and its development prospects.

The approach came immediately after Harworth’s half-year trading update, which highlighted advanced negotiations on a second hyperscale data centre site and strong demand across its industrial and logistics pipeline. The company said its powered land bank had the potential to generate significant additional value.

Harworth subsequently confirmed that it had signed an exclusivity agreement with a leading data centre provider for a sale of powered land, further reinforcing the attractions of the company’s development pipeline.

The offer is another reminder of one of the key themes running through the listed property sector – corporate buyers see value that public markets have been reluctant to recognise.

First Property Group (FPO) was the second-best performer, gaining 12.5%, while Workspace Group (WKP) rose 7.8%.

The remainder of the top ten was much more tightly bunched. Ground Rents Income Fund (GRIO) gained 2.9%, Shaftesbury Capital (SHC) rose 2.4%, and Real Estate Investors (RLE) added 1.6%. Globalworth Real Estate Investments (GWI) and Primary Health Properties (PHP) also posted modest gains of 1.4% and 1.2% respectively.

Helical (HLCL) was up 0.5%, while Supermarket Income REIT (SUPR), at -0.2%, was effectively flat. The fact that the tenth-best performer was marginally negative illustrates just how narrow the gains were during August.

Worst performers in price terms

Source: Bloomberg, Marten & Co

RESI completed the disposal of its retirement portfolio to Living REIT (LIVE) for £108.3m and announced a £35.2m return of capital to shareholders through a B Share Scheme, equivalent to 19p per ordinary share. Further distributions are expected following the planned disposal of its shared-ownership portfolio. The 70.5% monthly share price decline therefore does not represent an equivalent destruction of shareholder value.

Macau Property Opportunities (MPO) was the next biggest faller, losing 22.9% and extending its already substantial losses. The shares are now down 74.2% over 12 months.

CLS Holdings (CLI) was another notable faller, dropping 10.4% after reporting disappointing half-year results. The shares are now 21.6% lower year-to-date and 21.3% below their level a year ago.

Valuation moves

Source: Marten & Co

The latest valuation updates paint a relatively mixed but generally stable picture of underlying property values. Target Healthcare REIT (THRL) was the only company in the group to report an increase in NAV, up 1.2% over the quarter to June, with the care home portfolio rising 1.1% on a like-for-like basis to £924.1m.

Elsewhere, valuation declines were relatively modest. Schroder REIT‘s (SREI) NAV fell 0.7%, while Alternative Income REIT (AIRE – the subject of a hostile takeover attempt by its largest shareholder) reported a decline of 1.3%.

Of those to report half-year numbers, Tritax Big Box REIT (BBOX) was down modestly, and Derwent London‘s (DLN) NAV fell 2.1%, with its property valuation down 1.3% to £4.3bn.

CLS Holdings was the clear outlier, with NAV falling 11.5% over the half-year as its office portfolio focused on the UK, France and Germany continues to struggle. The sharp NAV reduction helps explain the continuing weakness in its share price.

Overall, the valuation data suggests that the weakness in many listed property shares continues to be greater than the movement in their underlying property values, leaving wide discounts to NAV across parts of the sector and encouraging more takeovers, consolidation and activist campaigns.

Takeovers remain the most powerful catalyst

If July was dominated by the battle for SEGRO, August demonstrated that the appetite for listed property assets has not disappeared.

SEGRO formally accepted Prologis’ improved £14bn offer at the beginning of the month. The terms comprised 258p in cash and 0.0690 new Prologis shares for each SEGRO share, maintaining an implied value of 1,054.3p per share.

With SEGRO accounting for around a fifth of the UK-listed real estate sector by market value, its disappearance as an independent listed company will materially change the shape of the market.

With listed property companies still trading at wide discounts to their underlying assets, strategic buyers are still sniffing around for opportunities.

Wind-downs and consolidation continue

The other side of the sector’s M&A activity is the continued reduction in the number of listed property vehicles.

abrdn European Logistics Income (ASLI) said in August that it could enter voluntary liquidation before the end of the year, subject to the disposal of its final asset. It has already returned £242m, or 58.68p per share, to investors since shareholders voted for a managed wind-down in July 2024.

Real Estate Investors (RLE), meanwhile, said it was on track to repay all its debt by the end of 2026, paving the way for returns of capital as part of its own wind-down. The company had resumed marketing properties for sale after pausing the process earlier in the year.

There was also progress with the £404m combination of Picton Property Income (PCTN) with LondonMetric Property (LMP) and Schroder REIT, with the transaction moving towards completion.

Saba’s 5.1% stake in Unite Group (UTG) adds another potential catalyst to a sector where investors are increasingly demanding action on discounts.

Unite had already announced plans to reduce its student accommodation footprint by a quarter and concentrate on the UK’s 20 strongest university markets. The company is accelerating disposals to streamline the portfolio and fund share buybacks and returns of capital.

Investors will be watching closely to see whether Unite’s capital allocation strategy evolves further in light of Saba’s involvement.