Franklin Real Estate Securities Trust
06/25/2026 | Press release | Distributed by Public on 06/25/2026 11:13
Annual Report by Investment Company (Form N-CSR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08034
Franklin Real Estate Securities Trust
(Exact name of registrant as specified in charter)
One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)
Alison Baur
Franklin Templeton
One Franklin Parkway
San Mateo, CA 94403-1906
(Name and address of agent for service)
Registrant's telephone number, including area code: (650) 312-2000
Date of fiscal year end: April 30
Date of reporting period: April 30, 2026
| ITEM 1. | REPORT TO STOCKHOLDERS |
(a) The Report to Shareholders is filed herewith
|
Franklin Real Estate Securities Fund
|
||
|
Class A [FREEX]
|
||
|
Annual Shareholder Report | April 30, 2026
|
||
This annual shareholder report contains important information about Franklin Real Estate Securities Fund for the period May 1, 2025, to April 30, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
|
Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment*
|
|
Class A
|
$115
|
1.08%
|
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended April 30, 2026, Class A shares of Franklin Real Estate Securities Fund returned 12.61%. The Fund compares its performance to the MSCI US IMI Real Estate 25/50 Index† which returned 13.35% for the same period.
PERFORMANCE HIGHLIGHTS
|
Top contributors to performance:
|
|
|
↑
|
Stock selection and an underweight in the real estate services subsector and stock selection in the health care property and triple net subsectors drove outperformance. Within the health care property subsector, Welltower was a leading contributor to relative returns, continuing to benefit from excess demand for senior housing. Over the period, the company executed on a significant volume of accretive investments, while posting strong organic growth that exceeded expectations, which in turn drove substantial FFO per share growth at the company level.
|
|
↑
|
Also in the health care property subsector, American Healthcare REIT (AHR) was a leading contributor. AHR also benefited from the performance of their seniors only housing portfolio, as new supply remains constrained. The company also completed a significant volume of seniors only housing acquisitions, while raising full-year guidance multiple times over the course of the period.
|
|
↑
|
In the triple net subsector, NETSTREIT added to relative returns. The company regained its cost of capital on the back of improving operating metrics, which in turn enabled them to raise forward equity to fund future growth via acquisitions.
|
|
Top detractors from performance:
|
|
|
↓
|
An overweight and stock selection in the residential property subsector dampened relative returns, as pricing power diminished amid elevated supply levels and a softer demand profile amid weaker job numbers. Within the subsector, American Homes 4 Rent, which is one of the largest owners and operators of U.S. single-family rental homes, struggled amid mounting political challenges, namely the proclamation of some to curb institutional investments in the single-family rental market. The company was also facing softer pricing power amid elevated supply levels and weaker housing demand.
|
|
↓
|
Additionally, within residential, AvalonBay Communities detracted from relative performance. The company, one of the largest apartment landlords in the country, faced additional pressure from slower than expected lease-up across its recent development completions.
|
|
↓
|
Stock selection in the towers/infrastructure subsector also detracted from relative annual returns. Within the sector, the Fund held American Tower Corporation, which similar to other tower owners and operators, experienced softer top-line trends amid subdued carrier spending.
|
| Franklin Real Estate Securities Fund | PAGE 1 | 192-ATSR-0626 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
The Fund's past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.
VALUE OF A $10,000 INVESTMENT ($9,450 AFTER MAXIMUM APPLICABLE SALES CHARGE) -
Class A 4/30/2016 - 4/30/2026
Class A 4/30/2016 - 4/30/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended April 30, 2026
|
1 Year
|
5 Year
|
10 Year
|
|
|
Class A
|
12.61
|
3.42
|
5.32
|
|
Class A (with sales charge)
|
6.41
|
2.26
|
4.73
|
|
Russell 3000 Index
|
31.01
|
11.91
|
14.76
|
|
MSCI US IMI Real Estate 25/50 Index†
|
13.35
|
3.41
|
6.39
|
| † | The inception date of the MSCI U.S. IMI Real Estate 25/50 Index was September 1, 2016; however, the performance prior to its inception has been calculated by MSCI for the purpose of this chart. |
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
Performance for periods prior to September 10, 2018, has been restated to reflect the current maximum sales charge, which is lower than the maximum sales charge prior to that date.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.
https://www.franklintempleton.com/investments/options/mutual-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of April 30, 2026)
|
Total Net Assets
|
$240,910,385
|
|
Total Number of Portfolio Holdings
|
40
|
|
Total Management Fee Paid
|
$1,333,392
|
|
Portfolio Turnover Rate
|
32.25%
|
| Franklin Real Estate Securities Fund | PAGE 2 | 192-ATSR-0626 |
WHAT DID THE FUND INVEST IN? (as of April 30, 2026)
Portfolio Composition*(% of Total Investments)
| * | Does not include derivatives, except purchased options, if any. |
|
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
|
HOUSEHOLDING
You will receive the Fund's shareholder reports every six months. In addition, you will receive an annual updated summary prospectus (detail prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the shareholder reports and summary prospectus. This process, called "householding," will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) DIAL BEN/342-5236. At any time, you may view current prospectuses/summary prospectuses and shareholder reports on our website. If you choose, you may receive these documents through electronic delivery.
| Franklin Real Estate Securities Fund | PAGE 3 | 192-ATSR-0626 |
|
Franklin Real Estate Securities Fund
|
||
|
Class C [FRRSX]
|
||
|
Annual Shareholder Report | April 30, 2026
|
||
This annual shareholder report contains important information about Franklin Real Estate Securities Fund for the period May 1, 2025, to April 30, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
|
Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment*
|
|
Class C
|
$194
|
1.83%
|
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended April 30, 2026, Class C shares of Franklin Real Estate Securities Fund returned 11.76%. The Fund compares its performance to the MSCI US IMI Real Estate 25/50 Index† which returned 13.35% for the same period.
PERFORMANCE HIGHLIGHTS
|
Top contributors to performance:
|
|
|
↑
|
Stock selection and an underweight in the real estate services subsector and stock selection in the health care property and triple net subsectors drove outperformance. Within the health care property subsector, Welltower was a leading contributor to relative returns, continuing to benefit from excess demand for senior housing. Over the period, the company executed on a significant volume of accretive investments, while posting strong organic growth that exceeded expectations, which in turn drove substantial FFO per share growth at the company level.
|
|
↑
|
Also in the health care property subsector, American Healthcare REIT (AHR) was a leading contributor. AHR also benefited from the performance of their seniors only housing portfolio, as new supply remains constrained. The company also completed a significant volume of seniors only housing acquisitions, while raising full-year guidance multiple times over the course of the period.
|
|
↑
|
In the triple net subsector, NETSTREIT added to relative returns. The company regained its cost of capital on the back of improving operating metrics, which in turn enabled them to raise forward equity to fund future growth via acquisitions.
|
|
Top detractors from performance:
|
|
|
↓
|
An overweight and stock selection in the residential property subsector dampened relative returns, as pricing power diminished amid elevated supply levels and a softer demand profile amid weaker job numbers. Within the subsector, American Homes 4 Rent, which is one of the largest owners and operators of U.S. single-family rental homes, struggled amid mounting political challenges, namely the proclamation of some to curb institutional investments in the single-family rental market. The company was also facing softer pricing power amid elevated supply levels and weaker housing demand.
|
|
↓
|
Additionally, within residential, AvalonBay Communities detracted from relative performance. The company, one of the largest apartment landlords in the country, faced additional pressure from slower than expected lease-up across its recent development completions.
|
|
↓
|
Stock selection in the towers/infrastructure subsector also detracted from relative annual returns. Within the sector, the Fund held American Tower Corporation, which similar to other tower owners and operators, experienced softer top-line trends amid subdued carrier spending.
|
| Franklin Real Estate Securities Fund | PAGE 1 | 292-ATSR-0626 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
The Fund's past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.
VALUE OF A $10,000 INVESTMENT - Class C 4/30/2016 - 4/30/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended April 30, 2026
|
1 Year
|
5 Year
|
10 Year
|
|
|
Class C
|
11.76
|
2.64
|
4.53
|
|
Class C (with sales charge)
|
10.76
|
2.64
|
4.53
|
|
Russell 3000 Index
|
31.01
|
11.91
|
14.76
|
|
MSCI US IMI Real Estate 25/50 Index†
|
13.35
|
3.41
|
6.39
|
| † | The inception date of the MSCI U.S. IMI Real Estate 25/50 Index was September 1, 2016; however, the performance prior to its inception has been calculated by MSCI for the purpose of this chart. |
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.
https://www.franklintempleton.com/investments/options/mutual-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of April 30, 2026)
|
Total Net Assets
|
$240,910,385
|
|
Total Number of Portfolio Holdings
|
40
|
|
Total Management Fee Paid
|
$1,333,392
|
|
Portfolio Turnover Rate
|
32.25%
|
| Franklin Real Estate Securities Fund | PAGE 2 | 292-ATSR-0626 |
WHAT DID THE FUND INVEST IN? (as of April 30, 2026)
Portfolio Composition*(% of Total Investments)
| * | Does not include derivatives, except purchased options, if any. |
|
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
|
HOUSEHOLDING
You will receive the Fund's shareholder reports every six months. In addition, you will receive an annual updated summary prospectus (detail prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the shareholder reports and summary prospectus. This process, called "householding," will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) DIAL BEN/342-5236. At any time, you may view current prospectuses/summary prospectuses and shareholder reports on our website. If you choose, you may receive these documents through electronic delivery.
| Franklin Real Estate Securities Fund | PAGE 3 | 292-ATSR-0626 |
|
Franklin Real Estate Securities Fund
|
||
|
Class R6 [FSERX]
|
||
|
Annual Shareholder Report | April 30, 2026
|
||
This annual shareholder report contains important information about Franklin Real Estate Securities Fund for the period May 1, 2025, to April 30, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
|
Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment*
|
|
Class R6
|
$70
|
0.66%
|
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended April 30, 2026, Class R6 shares of Franklin Real Estate Securities Fund returned 13.12%. The Fund compares its performance to the MSCI US IMI Real Estate 25/50 Index† which returned 13.35% for the same period.
PERFORMANCE HIGHLIGHTS
|
Top contributors to performance:
|
|
|
↑
|
Stock selection and an underweight in the real estate services subsector and stock selection in the health care property and triple net subsectors drove outperformance. Within the health care property subsector, Welltower was a leading contributor to relative returns, continuing to benefit from excess demand for senior housing. Over the period, the company executed on a significant volume of accretive investments, while posting strong organic growth that exceeded expectations, which in turn drove substantial FFO per share growth at the company level.
|
|
↑
|
Also in the health care property subsector, American Healthcare REIT (AHR) was a leading contributor. AHR also benefited from the performance of their seniors only housing portfolio, as new supply remains constrained. The company also completed a significant volume of seniors only housing acquisitions, while raising full-year guidance multiple times over the course of the period.
|
|
↑
|
In the triple net subsector, NETSTREIT added to relative returns. The company regained its cost of capital on the back of improving operating metrics, which in turn enabled them to raise forward equity to fund future growth via acquisitions.
|
|
Top detractors from performance:
|
|
|
↓
|
An overweight and stock selection in the residential property subsector dampened relative returns, as pricing power diminished amid elevated supply levels and a softer demand profile amid weaker job numbers. Within the subsector, American Homes 4 Rent, which is one of the largest owners and operators of U.S. single-family rental homes, struggled amid mounting political challenges, namely the proclamation of some to curb institutional investments in the single-family rental market. The company was also facing softer pricing power amid elevated supply levels and weaker housing demand.
|
|
↓
|
Additionally, within residential, AvalonBay Communities detracted from relative performance. The company, one of the largest apartment landlords in the country, faced additional pressure from slower than expected lease-up across its recent development completions.
|
|
↓
|
Stock selection in the towers/infrastructure subsector also detracted from relative annual returns. Within the sector, the Fund held American Tower Corporation, which similar to other tower owners and operators, experienced softer top-line trends amid subdued carrier spending.
|
| Franklin Real Estate Securities Fund | PAGE 1 | 372-ATSR-0626 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
The Fund's past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.
VALUE OF A $10,000 INVESTMENT - Class R6 4/30/2016 - 4/30/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended April 30, 2026
|
1 Year
|
5 Year
|
10 Year
|
|
|
Class R6
|
13.12
|
3.90
|
5.80
|
|
Russell 3000 Index
|
31.01
|
11.91
|
14.76
|
|
MSCI US IMI Real Estate 25/50 Index†
|
13.35
|
3.41
|
6.39
|
| † | The inception date of the MSCI U.S. IMI Real Estate 25/50 Index was September 1, 2016; however, the performance prior to its inception has been calculated by MSCI for the purpose of this chart. |
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.
https://www.franklintempleton.com/investments/options/mutual-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of April 30, 2026)
|
Total Net Assets
|
$240,910,385
|
|
Total Number of Portfolio Holdings
|
40
|
|
Total Management Fee Paid
|
$1,333,392
|
|
Portfolio Turnover Rate
|
32.25%
|
| Franklin Real Estate Securities Fund | PAGE 2 | 372-ATSR-0626 |
WHAT DID THE FUND INVEST IN? (as of April 30, 2026)
Portfolio Composition*(% of Total Investments)
| * | Does not include derivatives, except purchased options, if any. |
|
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
|
HOUSEHOLDING
You will receive the Fund's shareholder reports every six months. In addition, you will receive an annual updated summary prospectus (detail prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the shareholder reports and summary prospectus. This process, called "householding," will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) DIAL BEN/342-5236. At any time, you may view current prospectuses/summary prospectuses and shareholder reports on our website. If you choose, you may receive these documents through electronic delivery.
| Franklin Real Estate Securities Fund | PAGE 3 | 372-ATSR-0626 |
|
Franklin Real Estate Securities Fund
|
||
|
Advisor Class [FRLAX]
|
||
|
Annual Shareholder Report | April 30, 2026
|
||
This annual shareholder report contains important information about Franklin Real Estate Securities Fund for the period May 1, 2025, to April 30, 2026.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) DIAL BEN/342-5236.
WHAT WERE THE FUND COSTS FOR THE LAST YEAR? (based on a hypothetical $10,000 investment)
|
Class Name
|
Costs of a $10,000 investment
|
Costs paid as a percentage of a $10,000 investment*
|
|
Advisor Class
|
$88
|
0.83%
|
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
HOW DID THE FUND PERFORM LAST YEAR AND WHAT AFFECTED ITS PERFORMANCE?
For the twelve months ended April 30, 2026, Advisor Class shares of Franklin Real Estate Securities Fund returned 12.87%. The Fund compares its performance to the MSCI US IMI Real Estate 25/50 Index† which returned 13.35% for the same period.
PERFORMANCE HIGHLIGHTS
|
Top contributors to performance:
|
|
|
↑
|
Stock selection and an underweight in the real estate services subsector and stock selection in the health care property and triple net subsectors drove outperformance. Within the health care property subsector, Welltower was a leading contributor to relative returns, continuing to benefit from excess demand for senior housing. Over the period, the company executed on a significant volume of accretive investments, while posting strong organic growth that exceeded expectations, which in turn drove substantial FFO per share growth at the company level.
|
|
↑
|
Also in the health care property subsector, American Healthcare REIT (AHR) was a leading contributor. AHR also benefited from the performance of their seniors only housing portfolio, as new supply remains constrained. The company also completed a significant volume of seniors only housing acquisitions, while raising full-year guidance multiple times over the course of the period.
|
|
↑
|
In the triple net subsector, NETSTREIT added to relative returns. The company regained its cost of capital on the back of improving operating metrics, which in turn enabled them to raise forward equity to fund future growth via acquisitions.
|
|
Top detractors from performance:
|
|
|
↓
|
An overweight and stock selection in the residential property subsector dampened relative returns, as pricing power diminished amid elevated supply levels and a softer demand profile amid weaker job numbers. Within the subsector, American Homes 4 Rent, which is one of the largest owners and operators of U.S. single-family rental homes, struggled amid mounting political challenges, namely the proclamation of some to curb institutional investments in the single-family rental market. The company was also facing softer pricing power amid elevated supply levels and weaker housing demand.
|
|
↓
|
Additionally, within residential, AvalonBay Communities detracted from relative performance. The company, one of the largest apartment landlords in the country, faced additional pressure from slower than expected lease-up across its recent development completions.
|
|
↓
|
Stock selection in the towers/infrastructure subsector also detracted from relative annual returns. Within the sector, the Fund held American Tower Corporation, which similar to other tower owners and operators, experienced softer top-line trends amid subdued carrier spending.
|
| Franklin Real Estate Securities Fund | PAGE 1 | 692-ATSR-0626 |
HOW DID THE FUND PERFORM OVER THE LAST 10 YEARS?
The Fund's past performance is not necessarily an indication of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares.
VALUE OF A $10,000 INVESTMENT - Advisor Class 4/30/2016 - 4/30/2026
AVERAGE ANNUAL TOTAL RETURNS (%) Period Ended April 30, 2026
|
1 Year
|
5 Year
|
10 Year
|
|
|
Advisor Class
|
12.87
|
3.67
|
5.59
|
|
Russell 3000 Index
|
31.01
|
11.91
|
14.76
|
|
MSCI US IMI Real Estate 25/50 Index†
|
13.35
|
3.41
|
6.39
|
| † | The inception date of the MSCI U.S. IMI Real Estate 25/50 Index was September 1, 2016; however, the performance prior to its inception has been calculated by MSCI for the purpose of this chart. |
Fund performance figures may reflect fee waivers and/or expense reimbursements, without which the performance would have been lower.
For current month-end performance, please call Franklin Templeton at (800) DIAL BEN/342-5236 or visit
https://www.franklintempleton.com/investments/options/mutual-funds.
https://www.franklintempleton.com/investments/options/mutual-funds.
Important data provider notices and terms available at www.franklintempletondatasources.com.
KEY FUND STATISTICS (as of April 30, 2026)
|
Total Net Assets
|
$240,910,385
|
|
Total Number of Portfolio Holdings
|
40
|
|
Total Management Fee Paid
|
$1,333,392
|
|
Portfolio Turnover Rate
|
32.25%
|
| Franklin Real Estate Securities Fund | PAGE 2 | 692-ATSR-0626 |
WHAT DID THE FUND INVEST IN? (as of April 30, 2026)
Portfolio Composition*(% of Total Investments)
| * | Does not include derivatives, except purchased options, if any. |
|
WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND?
|
|
|
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its:
|
|
|
• prospectus • proxy voting information • financial information • holdings • tax information
|
HOUSEHOLDING
You will receive the Fund's shareholder reports every six months. In addition, you will receive an annual updated summary prospectus (detail prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the shareholder reports and summary prospectus. This process, called "householding," will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) DIAL BEN/342-5236. At any time, you may view current prospectuses/summary prospectuses and shareholder reports on our website. If you choose, you may receive these documents through electronic delivery.
| Franklin Real Estate Securities Fund | PAGE 3 | 692-ATSR-0626 |
(b) Not applicable
| ITEM 2. | CODE OF ETHICS. |
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 19(a) (1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
The Board of Trustees of the Registrant has determined that Mary C. Choksi, possesses the technical attributes identified in Item 3 to Form N-CSR to qualify as an "audit committee financial expert," and has designated Mary C. Choksi as the Audit Committee's financial expert. Mary C. Choksi is an "independent" Trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
a) Audit Fees. The aggregate fees billed in the last two fiscal years ending April 30, 2025 and April 30, 2026 (the "Reporting Periods") for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $30,374 in April 30, 2025 and $41,945 in April 30, 2026.
b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant's financial statements were $0 in April 30, 2025 and $0 in April 30, 2026.
(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning ("Tax Services") were $10,000 in April 30, 2025 and $10,000 in April 30, 2026. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.
There were no fees billed for tax services by the Registrant's investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant ("Service Affiliates") during the Reporting Periods that required pre-approval by the Audit Committee.
(d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor to the Registrant, other than the services reported in paragraphs (a) through (c) of this item, were $0 in April 30, 2025 and $0 in April 30, 2026.
There were no other non-audit services rendered by the Auditor to the Service Affiliates requiring pre-approval by the Audit Committee in the Reporting Periods.
(e) Audit Committee's pre-approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
(1) The Registrant's Audit Committee is directly responsible for approving the services to be provided by the Auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to the Registrant by the Auditors;
(iii) pre-approval of all non-audit related services to be provided by the Auditors to the Registrant and the Service Affiliates where the non-audit services relate directly to the operations or financial reporting of the Registrant; and
(iv) establishment by the Audit Committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the Auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of Audit Committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
(2) None of the services described in paragraphs (b) through (d) of this Item were performed in reliance on paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) Non-audit fees billed by the Auditor for services rendered to the Registrant and the Service Affiliates during the reporting period were $377,023 in April 30, 2025 and $1,690,011 in April 30, 2026.
(h) Yes. The Registrant's Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor's independence. All services provided by the Auditor to the Registrant or to the Service Affiliates, which were required to be pre-approved, were pre-approved as required.
(i) Not applicable.
(j) Not applicable.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
| ITEM 6. | SCHEDULE OF INVESTMENTS. |
| (a) | Please see schedule of investments contained in the Financial Statements and Financial Highlights included under Item 7 of this Form N-CSR. |
| (b) | Not applicable. |
| ITEM 7. | FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Franklin
Real
Estate
Securities
Trust
Financial
Statements
and
Other
Important
Information
Annual
|
April
30,
2026
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you
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Table
of
Contents
franklintempleton.com
Financial
Statements
and
Other
Important
Information-Annual
1
Financial
Highlights
and
Schedule
of
Investments
2
Financial
Statements
8
Notes
to
Financial
Statements
11
Report
of
Independent
Registered
Public
Accounting
Firm
19
Tax
Information
20
Changes
In
and
Disagreements
with
Accountants
21
Results
of
Meeting(s)
of
Shareholders
21
Remuneration
Paid
to
Directors,
Officers
and
Others
21
Board
Approval
of
Management
and
Subadvisory
Agreements
21
Franklin
Real
Estate
Securities
Trust
Financial
Highlights
Franklin
Real
Estate
Securities
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
2
a
Year
Ended
April
30,
2026
2025
2024
2023
2022
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$16.82
$16.00
$17.61
$21.91
$20.66
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.29
0.16
0.33
0.31
0.09
Net
realized
and
unrealized
gains
(losses)
...........
1.70
2.62
(1.03)
(3.97)
2.44
Total
from
investment
operations
....................
1.99
2.78
(0.70)
(3.66)
2.53
Less
distributions
from:
Net
investment
income
..........................
(0.26)
(0.41)
(0.36)
(0.23)
(0.18)
Net
realized
gains
.............................
(0.79)
(1.55)
(0.55)
(0.41)
(1.10)
Total
distributions
...............................
(1.05)
(1.96)
(0.91)
(0.64)
(1.28)
Net
asset
value,
end
of
year
.......................
$17.76
$16.82
$16.00
$17.61
$21.91
Total
return
c
...................................
12.61%
17.71%
(4.34)%
(16.70)%
11.99%
Ratios
to
average
net
assets
Expenses
d
....................................
1.08%
1.03%
1.16%
e
1.05%
e
1.11%
Net
investment
income
...........................
1.70%
0.89%
1.94%
1.66%
0.41%
Supplemental
data
Net
assets
,
end
of
year
(000's)
.....................
$188,671
$198,076
$199,460
$262,766
$361,133
Portfolio
turnover
rate
............................
32.25%
28.21%
17.38%
10.69%
22.14%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund's
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Real
Estate
Securities
Trust
Financial
Highlights
Franklin
Real
Estate
Securities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
3
a
Year
Ended
April
30,
2026
2025
2024
2023
2022
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$15.31
$14.72
$16.29
$20.39
$19.37
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.15
0.02
0.19
0.15
(0.08)
Net
realized
and
unrealized
gains
(losses)
...........
1.53
2.43
(0.95)
(3.69)
2.29
Total
from
investment
operations
....................
1.68
2.45
(0.76)
(3.54)
2.21
Less
distributions
from:
Net
investment
income
..........................
(0.19)
(0.31)
(0.26)
(0.15)
(0.09)
Net
realized
gains
.............................
(0.79)
(1.55)
(0.55)
(0.41)
(1.10)
Total
distributions
...............................
(0.98)
(1.86)
(0.81)
(0.56)
(1.19)
Net
asset
value,
end
of
year
.......................
$16.01
$15.31
$14.72
$16.29
$20.39
Total
return
c
...................................
11.76%
16.92%
(5.06)%
(17.38)%
11.13%
Ratios
to
average
net
assets
Expenses
d
....................................
1.83%
1.77%
1.91%
e
1.80%
e
1.87%
Net
investment
income
(loss)
......................
0.95%
0.14%
1.18%
0.89%
(0.38)%
Supplemental
data
Net
assets
,
end
of
year
(000's)
.....................
$4,461
$4,789
$5,988
$9,132
$17,704
Portfolio
turnover
rate
............................
32.25%
28.21%
17.38%
10.69%
22.14%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund's
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Real
Estate
Securities
Trust
Financial
Highlights
Franklin
Real
Estate
Securities
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
4
a
Year
Ended
April
30,
2026
2025
2024
2023
2022
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$17.26
$16.37
$17.99
$22.39
$21.03
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.37
0.22
0.46
0.41
0.21
Net
realized
and
unrealized
gains
(losses)
...........
1.75
2.69
(1.08)
(4.07)
2.49
Total
from
investment
operations
....................
2.12
2.91
(0.62)
(3.66)
2.70
Less
distributions
from:
Net
investment
income
..........................
(0.33)
(0.47)
(0.45)
(0.33)
(0.24)
Net
realized
gains
.............................
(0.79)
(1.55)
(0.55)
(0.41)
(1.10)
Total
distributions
...............................
(1.12)
(2.02)
(1.00)
(0.74)
(1.34)
Net
asset
value,
end
of
year
.......................
$18.26
$17.26
$16.37
$17.99
$22.39
Total
return
....................................
13.12%
18.13%
(3.83)%
(16.29)%
12.56%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.88%
0.75%
0.72%
0.62%
0.63%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
0.66%
0.66%
0.64%
c
0.57%
c
0.60%
Net
investment
income
...........................
2.11%
1.23%
2.61%
2.16%
0.93%
Supplemental
data
Net
assets
,
end
of
year
(000's)
.....................
$18,508
$21,280
$17,073
$35,251
$37,871
Portfolio
turnover
rate
............................
32.25%
28.21%
17.38%
10.69%
22.14%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund's
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Real
Estate
Securities
Trust
Financial
Highlights
Franklin
Real
Estate
Securities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
5
a
Year
Ended
April
30,
2026
2025
2024
2023
2022
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$17.18
$16.29
$17.91
$22.29
$20.97
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.34
0.20
0.39
0.36
0.15
Net
realized
and
unrealized
gains
(losses)
...........
1.73
2.69
(1.06)
(4.06)
2.48
Total
from
investment
operations
....................
2.07
2.89
(0.67)
(3.70)
2.63
Less
distributions
from:
Net
investment
income
..........................
(0.30)
(0.45)
(0.40)
(0.27)
(0.21)
Net
realized
gains
.............................
(0.79)
(1.55)
(0.55)
(0.41)
(1.10)
Total
distributions
...............................
(1.09)
(2.00)
(0.95)
(0.68)
(1.31)
Net
asset
value,
end
of
year
.......................
$18.16
$17.18
$16.29
$17.91
$22.29
Total
return
....................................
12.87%
18.08%
(4.10)%
(16.52)%
12.25%
Ratios
to
average
net
assets
Expenses
c
.....................................
0.83%
0.78%
0.91%
d
0.80%
d
0.86%
Net
investment
income
...........................
1.96%
1.13%
2.22%
1.91%
0.65%
Supplemental
data
Net
assets
,
end
of
year
(000's)
.....................
$29,271
$30,506
$27,865
$40,211
$63,140
Portfolio
turnover
rate
............................
32.25%
28.21%
17.38%
10.69%
22.14%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund's
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Real
Estate
Securities
Trust
Schedule
of
Investments,
April
30,
2026
Franklin
Real
Estate
Securities
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
6
a
a
Country
Shares
a
Value
a
Common
Stocks
99.5%
Data
Center
REITs
13.2%
Digital
Realty
Trust,
Inc.
................................
United
States
64,294
$
12,919,236
Equinix,
Inc.
.........................................
United
States
17,554
19,007,998
31,927,234
Diversified
REITs
2.5%
Broadstone
Net
Lease,
Inc.
..............................
United
States
138,438
2,741,072
Essential
Properties
Realty
Trust,
Inc.
......................
United
States
100,832
3,169,150
5,910,222
Health
Care
REITs
17.9%
Healthpeak
Properties,
Inc.
..............................
United
States
171,402
2,771,570
a
Janus
Living,
Inc.
,
A-1
..................................
United
States
72,359
1,898,700
Sabra
Health
Care
REIT,
Inc.
............................
United
States
163,969
3,387,600
Ventas,
Inc.
..........................................
United
States
94,482
8,301,189
Welltower,
Inc.
.......................................
United
States
122,744
26,677,181
43,036,240
Hotel
&
Resort
REITs
1.2%
Ryman
Hospitality
Properties,
Inc.
.........................
United
States
28,306
2,974,678
Industrial
REITs
12.4%
EastGroup
Properties,
Inc.
..............................
United
States
24,472
4,923,766
First
Industrial
Realty
Trust,
Inc.
..........................
United
States
75,968
4,710,776
Prologis,
Inc.
.........................................
United
States
116,820
16,590,777
STAG
Industrial,
Inc.
...................................
United
States
92,167
3,555,803
29,781,122
Multi-Family
Residential
REITs
7.9%
AvalonBay
Communities,
Inc.
............................
United
States
52,218
9,555,894
Camden
Property
Trust
.................................
United
States
64,259
6,748,480
b
GO
Residential
Real
Estate
Investment
Trust
,
144A
,
Reg
S
......
United
States
75,347
764,772
Independence
Realty
Trust,
Inc.
..........................
United
States
124,398
2,028,932
19,098,078
Office
REITs
2.3%
Cousins
Properties,
Inc.
................................
United
States
105,806
2,709,692
Highwoods
Properties,
Inc.
..............................
United
States
64,118
1,558,708
SL
Green
Realty
Corp.
.................................
United
States
30,061
1,274,887
5,543,287
Other
Specialized
REITs
3.2%
Iron
Mountain,
Inc.
....................................
United
States
60,768
7,656,160
Real
Estate
Services
2.4%
a
CBRE
Group,
Inc.
,
A
...................................
United
States
40,481
5,777,853
a
Retail
REITs
17.2%
Agree
Realty
Corp.
....................................
United
States
36,704
2,830,245
Brixmor
Property
Group,
Inc.
.............................
United
States
160,057
4,816,115
InvenTrust
Properties
Corp.
..............................
United
States
62,787
2,016,718
Macerich
Co.
(The)
....................................
United
States
145,510
3,161,932
NETSTREIT
Corp.
....................................
United
States
225,719
4,643,040
Realty
Income
Corp.
...................................
United
States
174,896
11,235,319
Regency
Centers
Corp.
.................................
United
States
67,337
5,242,186
Simon
Property
Group,
Inc.
..............................
United
States
36,881
7,513,029
41,458,584
Franklin
Real
Estate
Securities
Trust
Schedule
of
Investments
Franklin
Real
Estate
Securities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
7
a
a
Country
Shares
a
Value
a
Common
Stocks
(continued)
Self-Storage
REITs
4.6%
CubeSmart
..........................................
United
States
81,387
$
3,294,546
Extra
Space
Storage,
Inc.
...............................
United
States
40,417
5,792,968
Smartstop
Self
Storage
REIT,
Inc.
.........................
United
States
64,558
2,032,286
11,119,800
Single-Family
Residential
REITs
4.7%
American
Homes
4
Rent
,
A
..............................
United
States
201,541
6,417,065
Equity
LifeStyle
Properties,
Inc.
...........................
United
States
78,333
4,957,696
11,374,761
Telecom
Tower
REITs
8.6%
American
Tower
Corp.
..................................
United
States
93,917
17,159,575
Crown
Castle,
Inc.
.....................................
United
States
40,308
3,578,544
20,738,119
Timber
REITs
1.4%
Weyerhaeuser
Co.
....................................
United
States
136,750
3,353,110
Total
Common
Stocks
(Cost
$
145,403,599
)
.....................................
239,749,248
Short
Term
Investments
0.6%
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Money
Market
Funds
0.6%
c,d
Franklin
Institutional
U.S.
Government
Money
Market
Fund
,
3.593
%
United
States
1,410,951
1,410,951
Total
Money
Market
Funds
(Cost
$
1,410,951
)
...................................
1,410,951
Total
Short
Term
Investments
(Cost
$
1,410,951
)
.................................
1,410,951
a
Total
Investments
(Cost
$
146,814,550
)
100.1
%
..................................
$241,160,199
Other
Assets,
less
Liabilities
(
0.1
)
%
...........................................
(249,814)
Net
Assets
100.0%
...........................................................
$240,910,385
See
Abbreviations
on
page
18
.
a
Non-income
producing.
b
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
April
30,
2026,
the
value
of
this
security
was
$764,772,
representing
0.3%
of
net
assets.
c
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
d
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Real
Estate
Securities
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
April
30,
2026
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
8
Franklin
Real
Estate
Securities
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$188,670,827
Shares
outstanding
........................................................................
10,625,025
Net
asset
value
per
share
a
,b
..................................................................
$17.76
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94
.50
%
)
b
................................
$18.79
Class
C:
Net
assets,
at
value
.......................................................................
$4,460,617
Shares
outstanding
........................................................................
278,648
Net
asset
value
and
maximum
offering
price
per
share
a
,b
............................................
$16.01
Class
R6:
Net
assets,
at
value
.......................................................................
$18,508,363
Shares
outstanding
........................................................................
1,013,836
Net
asset
value
and
maximum
offering
price
per
share
b
.............................................
$18.26
Advisor
Class:
Net
assets,
at
value
.......................................................................
$29,270,578
Shares
outstanding
........................................................................
1,611,815
Net
asset
value
and
maximum
offering
price
per
share
b
.............................................
$18.16
Franklin
Real
Estate
Securities
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$145,403,599
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
1,410,951
Value
-
Unaffiliated
issuers
..................................................................
$239,749,248
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
1,410,951
Cash
....................................................................................
22,876
Receivables:
Investment
securities
sold
...................................................................
1,265,909
Capital
shares
sold
........................................................................
63,721
Dividends
...............................................................................
72,207
Total
assets
..........................................................................
242,584,912
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
1,239,717
Capital
shares
redeemed
...................................................................
129,891
Management
fees
.........................................................................
106,653
Distribution
fees
..........................................................................
41,219
Transfer
agent
fees
........................................................................
115,643
Trustees'
fees
and
expenses
.................................................................
12
Accrued
expenses
and
other
liabilities
...........................................................
41,392
Total
liabilities
.........................................................................
1,674,527
Net
assets,
at
value
.................................................................
$240,910,385
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$149,698,707
Total
distributable
earnings
(losses)
.............................................................
91,211,678
Net
assets,
at
value
.................................................................
$240,910,385
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
b
Net
asset
value
per
share
may
not
recalculate
due
to
rounding.
Franklin
Real
Estate
Securities
Trust
Financial
Statements
Statement
of
Operations
for
the
year
ended
April
30,
2026
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
9
Franklin
Real
Estate
Securities
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$5,723)
Unaffiliated
issuers
........................................................................
$6,682,832
Non-controlled
affiliates
(Note
3
f
)
.............................................................
47,521
Income
from
securities
loaned:
Unaffiliated
entities
(net
of
fees
and
rebates)
.....................................................
(5,246)
Non-controlled
affiliates
(Note
3
f
)
.............................................................
7,787
Total
investment
income
...................................................................
6,732,894
Expenses:
Management
fees
(Note
3
a
)
...................................................................
1,335,750
Distribution
fees:
(Note
3c
)
Class
A
................................................................................
469,275
Class
C
................................................................................
44,441
Transfer
agent
fees:
(Note
3e
)
Class
A
................................................................................
373,388
Class
C
................................................................................
8,838
Class
R6
...............................................................................
51,342
Advisor
Class
............................................................................
58,151
Custodian
fees
............................................................................
2,376
Reports
to
shareholders
fees
..................................................................
31,939
Registration
and
filing
fees
....................................................................
41,813
Professional
fees
...........................................................................
80,772
Trustees'
fees
and
expenses
..................................................................
2,925
Other
....................................................................................
25,836
Total
expenses
.........................................................................
2,526,846
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(47,441)
Net
expenses
.........................................................................
2,479,405
Net
investment
income
................................................................
4,253,489
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
9,602,077
Foreign
currency
transactions
................................................................
(77)
Net
realized
gain
(loss)
..................................................................
9,602,000
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
14,311,812
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
71
Net
change
in
unrealized
appreciation
(depreciation)
............................................
14,311,883
Net
realized
and
unrealized
gain
(loss)
............................................................
23,913,883
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$28,167,372
Franklin
Real
Estate
Securities
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
Franklin
Real
Estate
Securities
Fund
Year
Ended
April
30,
2026
Year
Ended
April
30,
2025
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$4,253,489
$2,507,280
Net
realized
gain
(loss)
.................................................
9,602,000
25,118,280
Net
change
in
unrealized
appreciation
(depreciation)
...........................
14,311,883
16,191,089
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
28,167,372
43,816,649
Distributions
to
shareholders:
Class
A
.............................................................
(11,289,148)
(22,654,414)
Class
C
.............................................................
(272,189)
(574,077)
Class
R6
............................................................
(1,348,381)
(2,078,840)
Advisor
Class
........................................................
(1,781,958)
(3,415,183)
Total
distributions
to
shareholders
..........................................
(14,691,676)
(28,722,514)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
(19,887,196)
(13,495,940)
Class
C
.............................................................
(541,770)
(1,583,006)
Class
R6
............................................................
(3,827,206)
3,213,050
Advisor
Class
........................................................
(2,959,434)
1,035,990
Total
capital
share
transactions
............................................
(27,215,606)
(10,829,906)
Net
increase
(decrease)
in
net
assets
...................................
(13,739,910)
4,264,229
Net
assets:
Beginning
of
year
.......................................................
254,650,295
250,386,066
End
of
year
...........................................................
$240,910,385
$254,650,295
Franklin
Real
Estate
Securities
Trust
11
franklintempleton.com
Annual
Report
Notes
to
Financial
Statements
Franklin
Real
Estate
Securities
Fund
1.
Organization
and
Significant
Accounting
Policies
Franklin
Real
Estate
Securities
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of one fund,
Franklin
Real
Estate
Securities
Fund (Fund).
The Fund
follows
the
accounting
and
reporting
guidance
in
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standards
Codification
Topic
946,
Financial
Services
-
Investment
Companies
(ASC
946)
and applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP),
including,
but
not
limited
to,
ASC
946.
The
Fund
offers four
classes
of
shares:
Class
A,
Class
C,
Class
R6
and
Advisor
Class. Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees.
The
following
summarizes
the Fund's
significant
accounting
policies.
a.
Financial
Instrument
Valuation
The
Fund's
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Fund
calculates
the
net
asset
value
(NAV)
per
share
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the Fund's
Board
of
Trustees
(the
Board),
the
Board
has
designated
the
Fund's
investment
manager
as
the
valuation
designee
and
has
responsibility
for
oversight
of
valuation.
The
investment
manager
is
assisted
by
the
Fund's
administrator
in
performing
this
responsibility,
including
leading
the
cross-
functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value.
Equity
securities
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities.
Investments
in open-end mutual
funds
are
valued
at
the
closing
NAV.
The
Fund
has
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
b.
Foreign
Currency
Translation
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Fund
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
12
franklintempleton.com
Annual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
The
Fund
does
not
separately
report
the
effect
of
changes
in
foreign
exchange
rates
from
changes
in
market
prices
on
securities
held.
Such
changes
are
included
in
net
realized
and
unrealized
gain
or
loss
from
investments
in
the
Statement of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Securities
Lending
The
Fund
participates
in
an
agency
based
securities
lending
program
to
earn
additional
income.
The
Fund
receives
collateral
in
the
form
of
cash
and/or
U.S.
Government
and
Agency
securities
against
the
loaned
securities
in
an
amount
equal
to
at
least
102%
of
the
fair
value
of
the
loaned
securities.
Collateral
is
maintained
over
the
life
of
the
loan
in
an
amount
not
less
than
100%
of
the
fair
value
of
loaned
securities,
as
determined
at
the
close
of
Fund
business
each
day;
any
additional
collateral
required
due
to
changes
in
security
values
is
delivered
to
the
Fund
on
the
next
business
day.
Any
cash
collateral
received
is
deposited
into
a
joint
cash
account
with
other
funds
and
is
used
to
invest
in
a
money
market
fund
managed
by
Franklin
Advisers,
Inc.,
an
affiliate
of
the
Fund. The
Fund
may
receive
income
from
the
investment
of
cash
collateral,
in
addition
to
lending
fees paid
by
the
borrower.
Income
from
securities
loaned,
net
of
fees
paid
to
the
securities
lending
agent
and/or
third-party
vendor,
is
reported
separately
in
the Statement of
Operations.
The
Fund
bears
the
market
risk
with
respect
to
any
cash
collateral
investment,
securities
loaned,
and
the
risk
that
the
agent
may
default
on
its
obligations
to
the
Fund.
If
the
borrower
defaults
on
its
obligation
to
return
the
securities
loaned,
the
Fund
has
the
right
to
repurchase
the
securities
in
the
open
market
using
the
collateral
received.
The
securities
lending
agent
has
agreed
to
indemnify
the
Fund
in
the
event
of
default
by
a
third
party
borrower.
Securities
on
loan
outstanding
at
period
end,
if
any,
are
listed
in
the
Fund's
Schedule
of
Investments.
d.
Income
and
Deferred
Taxes
It
is the Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. The Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and
excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The Fund
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which
it
invests.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Fund
invests.
When
a
capital
gain
tax
is
determined
to
apply,
the
Fund
records
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
The Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
April
30,
2026, the Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
The
Fund's
federal
and
state
income
and
federal
excise
tax
returns
for
the
prior
three
fiscal
years
are
subject
to
examination
by
the
Internal
Revenue
Service
and
state
departments
of
revenue.
e.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis. Estimated
expenses
are
accrued
daily.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Distributions
to
shareholders
are recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
1.
Organization
and
Significant
Accounting
Policies
(continued)
b.
Foreign
Currency
Translation
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
13
franklintempleton.com
Annual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
Distributions
received
by
the
Fund from
certain
securities
may
be
a
return
of
capital
(ROC).
Such
distributions
reduce
the
cost
basis
of
the
securities,
and
any
distributions
in
excess
of
the
cost
basis
are
recognized
as
capital
gains.
For
U.S.
Real
Estate
Investment
Trust
(REIT)
securities,
the Fund
records
ROC
estimates,
if
any,
on
the
ex-dividend
date
and
are
adjusted
once
actual
tax
designations
are
known.
f.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
g.
Guarantees
and
Indemnifications
Under
the Fund's
organizational
documents,
its
officers
and trustees
are
indemnified
by
the
Fund against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
Additionally,
in
the
normal
course
of
business,
the
Fund
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The Fund's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the Fund
that
have
not
yet
occurred.
Currently,
the Fund
expects
the
risk
of
loss
to
be
remote.
2.
Shares
of
Beneficial
Interest
At
April
30,
2026,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund's
shares
were
as
follows:
Year
Ended
April
30,
2026
Year
Ended
April
30,
2025
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
723,370
$12,103,248
671,222
$11,742,518
Shares
issued
in
reinvestment
of
distributions
..........
682,435
10,843,562
1,322,516
21,861,633
Shares
redeemed
...............................
(2,559,282)
(42,834,006)
(2,685,066)
(47,100,091)
Net
increase
(decrease)
..........................
(1,153,477)
$(19,887,196)
(691,328)
$(13,495,940)
Class
C
Shares:
Shares
sold
...................................
26,788
$409,391
25,671
$410,936
Shares
issued
in
reinvestment
of
distributions
..........
18,946
271,577
38,127
574,060
Shares
redeemed
a
..............................
(79,956)
(1,222,738)
(157,603)
(2,568,002)
Net
increase
(decrease)
..........................
(34,222)
$(541,770)
(93,805)
$(1,583,006)
Class
R6
Shares:
Shares
sold
...................................
408,329
$7,032,368
453,161
$8,139,916
Shares
issued
in
reinvestment
of
distributions
..........
82,440
1,347,451
122,378
2,077,202
Shares
redeemed
...............................
(709,835)
(12,207,025)
(385,886)
(7,004,068)
Net
increase
(decrease)
..........................
(219,066)
$(3,827,206)
189,653
$3,213,050
1.
Organization
and
Significant
Accounting
Policies
(continued)
e.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
14
franklintempleton.com
Annual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the Trust are
also
officers
and/or
directors
of
the
following
subsidiaries:
a.
Management
Fees
The
Fund
pays
an
investment
management fee,
calculated daily and
paid
monthly,
to
Advisers based
on the
average
daily net
assets
of
the
Fund
as
follows:
For
the
year
ended
April
30,
2026,
the
gross
effective
investment
management
fee
rate
was 0.551%
of
the
Fund's
average daily
net
assets.
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Fund.
The
fee
is
paid
by Advisers
based
on
the Fund's
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Fund.
Year
Ended
April
30,
2026
Year
Ended
April
30,
2025
Shares
Amount
Shares
Amount
Advisor
Class
Shares:
Shares
sold
...................................
266,722
$4,562,738
280,617
$5,034,185
Shares
issued
in
reinvestment
of
distributions
..........
80,511
1,309,400
151,198
2,552,475
Shares
redeemed
...............................
(511,543)
(8,831,572)
(365,778)
(6,550,670)
Net
increase
(decrease)
..........................
(164,310)
$(2,959,434)
66,037
$1,035,990
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.625%
Up
to
and
including
$100
million
0.500%
Over
$100
million,
up
to
and
including
$250
million
0.450%
Over
$250
million,
up
to
and
including
$7.5
billion
0.440%
Over
$7.5
billion,
up
to
and
including
$10
billion
0.430%
Over
$10
billion,
up
to
and
including
$12.5
billion
0.420%
Over
$12.5
billion,
up
to
and
including
$15
billion
0.400%
In
excess
of
$15
billion
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
15
franklintempleton.com
Annual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Fund's
Class
A
reimbursement
distribution
plan,
the
Fund
reimburses
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of the
Fund's
shares
up
to
the
maximum
annual
plan
rate.
Under
the
Class
A
reimbursement
distribution
plan,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Fund's
Class
C
compensation
distribution
plan,
the
Fund
pays
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
the
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rate,
is
February
1
through
January
31.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Fund.
These
charges
are
deducted
from
the
proceeds
of
sales
of
fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Fund
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Fund's
shares
for
the
year:
e.
Transfer
Agent
Fees
Each
class
of
shares
pays
transfer
agent
fees,
calculated
monthly
and
paid
monthly, to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations. The
fees
are based
on
a
fixed
margin
earned
by
Investor
Services
and
are allocated
to
the Fund
based
upon
relative
assets
and
relative
transactions. In
addition,
each
class reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6, reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
paid
to
third
parties
are
accrued
and
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
allocated
specifically
to
that
class
based
upon
its
relative
assets
and
relative
transactions.
For
the
year
ended
April
30,
2026,
the Fund
paid
transfer
agent
fees
as
noted
in
the
Statement of
Operations,
of
which
$201,943
was
retained
by
Investor
Services.
f.
Investments
in
Affiliated
Management
Investment
Companies
The
Fund
invests
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
"Controlled
Affiliate"
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund's
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Fund
does
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees,
if
applicable, paid
directly
or
indirectly
by
each
affiliate.
During
the
year
ended
April
30,
2026,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
1.00%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$7,110
CDSC
retained
..............................................................................
$421
3.
Transactions
with
Affiliates
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
16
franklintempleton.com
Annual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
g.
Waiver
and
Expense
Reimbursements
Transfer
agent
fees
on
Class
R6
shares
of
the
Fund have
been
capped
so
that
transfer
agent
fees
for
that
class
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
August
31,
2026.
4.
Income
Taxes
The
tax
character
of
distributions
paid
during
the
years
ended
April
30,
2026
and
2025,
was
as
follows:
At
April
30,
2026,
the
cost
of
investments,
net
unrealized
appreciation
(depreciation),
undistributed
ordinary
income
and
undistributed
long
term
capital
gains for
income
tax
purposes
were
as
follows:
aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
a
a
a
a
a
a
a
a
Franklin
Real
Estate
Securities
Fund
Non-Controlled
Affiliates
Dividends
Franklin
Institutional
U.S.
Government
Money
Market
Fund,
3.593%
............
$1,190,280
$37,196,550
$(36,975,879)
$-
$-
$1,410,951
1,410,951
$47,521
Non-Controlled
Affiliates
Income
from
securities
loaned
Franklin
Institutional
U.S.
Government
Money
Market
Fund,
3.593%
............
$-
$8,783,000
$(8,783,000)
$-
$-
$-
-
$7,787
Total
Affiliated
Securities
...
$1,190,280
$45,979,550
$(45,758,879)
$-
$-
$1,410,951
$55,308
2026
2025
Distributions
paid
from:
Ordinary
income
..........................................................
$4,643,554
$6,521,990
Long
term
capital
gain
......................................................
10,048,122
22,200,524
$14,691,676
$28,722,514
Cost
of
investments
..........................................................................
$153,135,071
Unrealized
appreciation
........................................................................
$97,858,424
Unrealized
depreciation
........................................................................
(9,833,296)
Net
unrealized
appreciation
(depreciation)
..........................................................
$88,025,128
Distributable
earnings:
Undistributed
ordinary
income
...................................................................
$465,273
Undistributed
long
term
capital
gains
..............................................................
2,721,274
Total
distributable
earnings
.....................................................................
$3,186,547
3.
Transactions
with
Affiliates
(continued)
f.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
17
franklintempleton.com
Annual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
wash
sales
and
corporate
actions.
The
Fund
utilized
a
tax
accounting
practice
to
treat
a
portion
of
the
proceeds
from
capital
shares
redeemed
as
a
distribution
from
realized
capital
gains.
5.
Investment
Transactions
Purchases
and
sales
of
investments (excluding
short
term
securities) for
the
year
ended
April
30,
2026,
aggregated
$77,835,834 and
$113,728,153,
respectively.
6.
Concentration
of
Risk
The
Fund
invests
a
large
percentage
of
its
total
assets
in
REIT securities.
Such
concentration
may
subject
the
Fund
to
special
risks
associated
with
real
estate
securities.
These
securities
may
be
more
sensitive
to
economic
or
regulatory
developments
due
to
a
variety
of
factors
such
as
local,
regional,
national
and
global
economic
conditions,
interest
rates
and
tax
considerations.
7.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.995
billion
(Global
Credit
Facility)
which
matures
on
January
29,
2027.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
may,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
During
the
year
ended
April
30,
2026,
the Fund
did
not
use
the
Global
Credit
Facility.
8.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
-
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
-
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
-
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
At
April
30,
2026,
all
of
the Fund's
investments
in
financial
instruments
carried
at
fair
value
were
valued
using
Level 1
inputs.
For
detailed
categories,
see
the
accompanying
Schedule
of
Investments.
4.
Income
Taxes
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
18
franklintempleton.com
Annual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
9.
Operating
Segments
The Fund operates
as
a
single
operating
segment,
which
is
an
investment
portfolio.
The
portfolio
managers
assigned
to
the
Fund
within
the
Fund's
investment
manager serve
as
the
Chief
Operating
Decision
Maker
("CODM")
and
are
responsible
for
evaluating
the
Fund's
operating
results
and
allocating
resources
in
accordance
with
the
Fund's
investment
strategy.
Internal
reporting
provided
to
the
CODM
aligns
with
the
accounting
policies
and
measurement
principles
used
in
the financial
statements.
For
information
regarding
segment
assets,
segment
profit
or
loss,
and
significant
expenses,
refer
to
the Statement
of
Assets
and
Liabilities
and
the Statement
of
Operations,
along
with
the
related
notes
to
the financial
statements.
The Schedule
of
Investments
provides
details
of
the Fund's investments
that
generate
returns
such
as
interest,
dividends,
and
realized
and
unrealized
gains
or
losses.
Performance
metrics,
including
portfolio
turnover
and
expense
ratios,
are
disclosed
in
the Financial
Highlights.
10.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the
financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Selected
Portfolio
REIT
Real
Estate
Investment
Trust
Franklin
Real
Estate
Securities
Trust
19
franklintempleton.com
Annual
Report
Report
of
Independent
Registered
Public
Accounting
Firm
To
the
Board
of
Trustees
of
Franklin
Real
Estate
Securities
Trust
and
Shareholders
of
Franklin
Real
Estate
Securities
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
investments,
of
Franklin
Real
Estate
Securities
Fund
(the
"Fund")
as
of
April
30,
2026,
the
related
statement
of
operations
for
the
year
ended
April
30,
2026,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
April
30,
2026,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
April
30,
2026
(collectively
referred
to
as
the
"financial
statements").
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
April
30,
2026,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
April
30,
2026
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
April
30,
2026
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund's
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
April
30,
2026
by
correspondence
with
the
custodian,
transfer
agent
and
brokers;
when
replies
were
not
received
from
a
broker,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/PricewaterhouseCoopers
LLP
San
Francisco,
California
June
17,
2026
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Franklin
Real
Estate
Securities
Trust
Tax
Information
(unaudited)
20
franklintempleton.com
Annual
Report
Franklin
Real
Estate
Securities
Fund
By
mid-February,
tax
information
related
to
a
shareholder's
proportionate
share
of
distributions
paid
during
the
preceding
calendar
year
will
be
received,
if
applicable.
Please
also
refer
to
www.franklintempleton.com
for
per
share
tax
information
related
to
any
distributions
paid
during
the
preceding
calendar
year.
Shareholders
are
advised
to
consult
with
their
tax
advisors
for
further
information
on
the
treatment
of
these
amounts
on
their
tax
returns.
The
following
tax
information
for
the
Fund
is
required
to
be
furnished
to
shareholders
with
respect
to
income
earned
and
distributions
paid
during
its
fiscal
year.
The
Fund
hereby
reports
the
following
amounts,
or
if
subsequently
determined
to
be
different,
the
maximum
allowable
amounts,
for
the
fiscal
year
ended
April
30,
2026:
Pursuant
to:
Amount
Reported
Long-Term
Capital
Gain
Dividends
Distributed
§852(b)(3)(C)
$9,865,185
Income
Eligible
for
Dividends
Received
Deduction
(DRD)
§854(b)(1)(A)
$1,997
Qualified
Dividend
Income
Earned
(QDI)
§854(b)(1)(B)
$123,366
Short-Term
Capital
Gain
Dividends
Distributed
§871(k)(2)(C)
$855,415
Qualified
Business
Income
Dividends
Earned
§199A
$3,930,120
Franklin
Real
Estate
Securities
Trust
21
franklintempleton.com
Annual
Report
Changes
In
and
Disagreements
with
Accountants
For
the
period
covered
by
this
report
Not
applicable.
Results
of
Meeting(s)
of
Shareholders
For
the
period
covered
by
this
report
Not
applicable.
Remuneration
Paid
to
Directors,
Officers
and
Others
For
the
period
covered
by
this
report
Refer
to
the
financial
statements
included
herein.
Remuneration
to
officers
is
paid
by
the
Fund's
investment
manager
according
to
the
terms
of
the
agreement.
Board
Approval
of
Management
and
Subadvisory
Agreements
For
the
period
covered
by
this
report
Not
applicable.
4192-AFSOI
06/26
©
2026
Franklin
Templeton.
All
rights
reserved.
| ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR.
| ITEM 9. | PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR.
| ITEM 10. | REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR.
| ITEM 11. | STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT. |
The information is disclosed as part of the Financial Statements included in Item 7 of this Form N-CSR, as applicable.
| ITEM 12. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 13. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 14. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| ITEM 15. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
| ITEM 16. | CONTROLS AND PROCEDURES. |
| (a) | The Registrants acknowledge the Staff's comment. In future filings on Form N-CSR, the certifications required by Rule 30a-2 and Item 19(a)(3) will include the designations "principal executive officer" and "principal financial officer" in the signature blocks, reflecting the capacity in which each signatory executes the certification, in conformity with the language of the Rule and Form N-CSR. The Registrants may also include each signatory's actual title with respect to the Funds alongside the required designation. |
| (b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected or are likely to materially affect the Registrant's internal control over financial reporting. |
| ITEM 17. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 18. | RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION. |
| (a) | Not applicable. |
| (b) | Not applicable. |
| ITEM 19. | EXHIBITS. |
Exhibit 99.CODE ETH
Exhibit 99.CERT
Exhibit 99.906CERT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized.
Franklin Real Estate Securities Trust
| By: | /s/ Christopher Kings | |
| Christopher Kings | ||
| Chief Executive Officer - Finance and Administration | ||
| Date: | June 25, 2026 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Christopher Kings | |
| Christopher Kings | ||
| Chief Executive Officer - Finance and Administration | ||
| Date: | June 25, 2026 |
| By: | /s/ Jeffrey White | |
| Jeffrey White | ||
| Chief Financial Officer, Chief Accounting Officer and Treasurer | ||
| Date: | June 25, 2026 |
Franklin Real Estate Securities Trust published this content on June 25, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on June 25, 2026 at 17:14 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]