Company: PGZ
Filing Date: 2025-01-03
Form Type: N-CSR
Source: 0001398344-25-000145
Chunk: 2

Company: Principal Real Estate Income Fund
Filing Date: 2025-01-03
Form: N-CSR
Chunk 2
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October 31, 2024 (Unaudited)

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

The Fund’s investment objective is
to seek to provide high current income, with capital appreciation as a secondary objective, by investing in commercial real estate-related
securities. There can be no assurance that the Fund will achieve its investment objective.

Under normal market conditions, the Fund
will invest at least 80% of its total assets in commercial real estate-related securities, primarily consisting of commercial mortgage
backed securities (“CMBS”) and other U.S. and non-U.S. real estate-related securities (primarily real estate investment
trusts (“REITs”) or REIT-like entities). Under normal circumstances, the Fund will invest between 40% and 70% of its
total assets in CMBS and will invest between 30% and 60% in other real estate-related securities (including REITs).

PERFORMANCE OVERVIEW

Principal Real Estate Income Fund (“PGZ”
or the “Fund”) was launched June 25, 2013. As of October 31, 2024, the Fund was 65.67% allocated to commercial mortgage-backed
securities (“CMBS”) and 31.95% in U.S. and International real estate securities, primarily real estate investment
trusts (“REITs”). For the 12-month period ended October 31, 2024, the Fund delivered a net return, at market price,
of 39.13%, assuming dividends are reinvested back into the Fund, based on the closing share price of $10.70 on October 31, 2024.
This compares to the return of the S&P 500 Index, over the same time-period, of 37.99% assuming dividends
are reinvested into the index. This also compares to the return of the Bloomberg U.S. Aggregate Bond Index of 10.55%.

The October 31, 2024, closing market price
of $10.70 represented a 9.7% discount to the Fund’s Net Asset Value (“NAV”). This compares to an average 2.21%
discount for equity real estate closed-end funds and a 0.65% premium for mortgage-backed securities closed-end funds (source: Bloomberg).

Based on NAV, the Fund returned 36.35%,
including dividends, for the 12-month period ended October 31, 2024. The theme that