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Overview of Distribution Announcement from Principal Real Estate Income Fund

On February 28, 2025, the Principal Real Estate Income Fund (NYSE: PGZ) made an important announcement regarding its recent distribution to shareholders. This distribution amounting to $0.1050 per share was paid to shareholders who were on record as of the close of business on February 13, 2025. This disbursement is a part of the Fund’s managed distribution plan and is done in accordance with regulations set by the U.S. Securities and Exchange Commission.

Sources of Distribution Explained

The announcement provided detailed insights into the sources of this distribution. According to the provisions of Section 19(a) of the Investment Company Act of 1940, the Fund outlined how the total distribution amount per share would be allocated. Here are the estimated sources:

• - Net Investment Income: $0.0468 (44.57%)
• - Net Realized Short-Term Capital Gains: $0.0000 (0.00%)
• - Net Realized Long-Term Capital Gains: $0.0000 (0.00%)
• - Return of Capital or Other Capital Source: $0.0582 (55.43%)

This breakdown exemplifies how a significant portion of the distribution came from returns of capital, highlighting that the Fund returned more than just net income to its shareholders. As a reminder, a return of capital can occur when a portion of the investment is paid back to shareholders, which does not necessarily reflect the performance of the Fund’s investments.

Financial Context and Tax Implications

The press release indicated that while the Fund has distributed more than its derived income, shareholders should be aware that tax characteristics regarding this distribution can differ from GAAP accounting perspectives. Moreover, the timing and main sources of distributions are crucial for federal income tax declarations. Shareholders are encouraged to keep this document for their records as the final tax character of distributions declared in 2025 will be clarified in January 2026. This will be communicated through IRS Form 1099-DIV, guiding how to report these distributions on their federal income tax returns.

Fund Performance Insights

The report also included performance metrics concerning the Fund's Net Asset Value (NAV), which is critical for understanding investment performance and valuation. The annualized distribution rate at 10.94% as of January 31, 2025, and cumulative metrics provide a broader picture:

• - Cumulative Distribution Rate on NAV: 3.65%
• - Cumulative Total Return on NAV: 0.22%
• - Average Annual Total Return on NAV over 5 Years: -3.45%

While the performance data reflects NAV changes, it does not directly measure the value of individual shareholder investments, which rely heavily on market price trends and supply/demand dynamics.

Future Prospects and Governance

The Fund's Board of Trustees is actively involved in reviewing distribution amounts based on multiple considerations, including net asset values and overarching financial market conditions. They retain the right to modify the distribution strategy as deemed necessary, a prudent move to adapt to changing economic realities.

In summary, the Principal Real Estate Income Fund's recent distribution announcement provides valuable insights into the financial landscape for shareholders, emphasizing the importance of being informed about both returns and tax implications. As it stands, shareholders must continue to be aware of how these distributions may impact their overall investment outcomes over time.