Company: PGZ
Filing Date: 2025-01-03
Form Type: N-CSR
Source: 0001398344-25-000145
Chunk: 6

Company: Principal Real Estate Income Fund
Filing Date: 2025-01-03
Form: N-CSR
Chunk 6
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 labor market health and with inflation seemingly tamed, we believe
that the Fed will want to reduce real interest rates to ensure that the ongoing economic deceleration does not develop into a recession.

A soft-landing, aided by declining inflation
allowing for rate cuts that stabilize the economy, should provide the best possible outcome of positive absolute and relative returns
for REITs. Rate cuts drive expectations of lower borrowing costs and discount rates which inordinately benefit capital intensive
asset classes; meanwhile improving growth helps bolster the topline. Admittedly a recession may mean negative absolute returns
for both broader equities and REITs; however, REITs have historically tended to be relatively defensive during such periods. Historical
evidence suggests that REITs have delivered strong positive returns in the 12 months after real yields peaked. We continue to believe
that the defensive REIT sector offers an attractive investment opportunity with valuations looking very cheap both when measured
against public equities and private real estate.

The Fund intends to make regular monthly
distributions to stockholders at a constant and fixed (but not guaranteed) rate. The Board of Trustees approve the distribution
and may adjust it from time to time. The monthly distribution amount from November 1, 2023 to October 31, 2024 was $0.105 per share.

At times, to
maintain a stable level of distributions, the Fund may pay out less than all of its net investment income or pay out
accumulated undistributed income, or return of capital, in addition to current net investment income. There is no guarantee
that the Fund’s current distribution policy will reduce or eliminate the Fund’s market price discount to its net
asset value per share and the Fund’s trustees have no fiduciary
duty to take action, or to consider taking any action, to narrow any such discount. The distribution policy may be changed or discontinued
without notice.

| 4 | www.principalcef.com |

| Principal Real Estate Income 
 Fund                         | Performance 
 Overview    |

October 31, 2024 (Unaudited)

The Board and the Fund’s management continue to evaluate
strategic opportunities for the Fund.

References:

The Premium/Discount is the amount (stated in dollars or percent) by which the selling or purchase price of a fund is greater than (premium) or less than (discount) its face amount/value or net asset value (NAV). Duration is a measure of the sensitivity of the price (the value