N-CSRS 1 primary-document.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM N-CSRS
 
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)
 
Craig S. Tyle, 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: 4/30
 
Date of reporting period: 10/31/21
 
 
Item 1. Reports to Stockholders.
 
a.)
 
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)


b.)
 
Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Not Applicable
.
 
Semiannual
Report
and
Shareholder
letter
Franklin
Real
Estate
Securities
Fund
A
Series
of
Franklin
Real
Estate
Securities
Trust
October
31,
2021
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
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FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Semiannual
Report
1
SHAREHOLDER
LETTER
Dear
Shareholder:
During
the
six
months
ended
October
31,
2021,
the
U.S.
economy
continued
to
recover
from
the
COVID-19
pandemic,
benefiting
equities.
Growth
accelerated
in
2021’s
first
half
as
the
reopening
of
businesses,
widespread
COVID-19
vaccinations
and
federal
assistance
programs
continued
to
boost
consumer
spending.
Inflation
increased
in
April
and
rose
further
during
the
reporting
period
due
to
increased
demand
for
goods
amid
supply-chain
bottlenecks.
During
the
summer,
investors
became
concerned
the
swiftly
spreading
Delta
variant
of
COVID-19
could
hinder
the
economic
recovery,
and
growth
slowed
in
2021’s
third
quarter.
During
the
reporting
period,
the
U.S.
Federal
Reserve
(Fed),
in
its
efforts
to
support
U.S.
economic
activity,
held
the
federal
funds
rate
unchanged
at
0.25%,
and
it
continued
broad
quantitative
easing
measures
to
bolster
credit
markets.
The
Fed
also
adjusted
its
economic
growth
and
inflation
projections
higher
and
expected
to
begin
decreasing
its
asset
purchases
later
this
year,
while
delaying
any
interest
rate
increases
until
reaching
its
goal
of
maximum
U.S.
employment.
In
this
environment,
U.S.
stocks,
as
measured
by
the
Standard
&
Poor’s
®
500
Index,
posted
a
+10.91%
total
return
for
the
six-month
period.
1
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
We
believe
active,
professional
investment
management
serves
investors
well.
We
also
recognize
the
important
role
of
financial
professionals
in
today’s
markets
and
encourage
investors
to
continue
to
seek
their
advice.
Amid
changing
markets
and
economic
conditions,
we
are
confident
investors
with
a
well-diversified
portfolio
and
a
patient,
long-term
outlook
should
be
well-positioned
for
the
years
ahead.
In
addition,
Franklin
Real
Estate
Securities
Fund’s
semiannual
report
includes
more
detail
about
prevailing
conditions
and
a
discussion
about
investment
decisions
during
the
period.
All
securities
markets
fluctuate,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin
Templeton,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
future
investment
needs.
Sincerely,
Edward
Perks,
CFA
President
and
Chief
Executive
Officer
–
Investment
Management
Franklin
Real
Estate
Securities
Trust
This
letter
reflects
our
analysis
and
opinions
as
of
October
31,
2021,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
CFA
®
is
a
trademark
owned
by
CFA
Institute.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Semiannual
Report
2
Contents
Semiannual
Report
Franklin
Real
Estate
Securities
Fund
3
Performance
Summary
6
Your
Fund’s
Expenses
8
Financial
Highlights
and
Statement
of
Investments
9
Financial
Statements
15
Notes
to
Financial
Statements
18
Shareholder
Information
25
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Semiannual
Report
SEMIANNUAL
REPORT
Franklin
Real
Estate
Securities
Fund
This
semiannual
report
for
Franklin
Real
Estate
Securities
Fund
covers
the
period
ended
October
31,
2021
.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
to
maximize
total
return.
Under
normal
market
conditions,
the
Fund
invests
at
least
80%
of
its
net
assets
in
equity
securities
of
companies
operating
in
the
real
estate
industry
predominantly
in
the
U.S.,
including
real
estate
investment
trusts
(REITs)
and
companies
that
derive
at
least
half
of
their
assets
or
revenues
from
the
ownership,
construction,
management,
operation,
development
or
sale
of
commercial
or
residential
real
estate.
1
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
+12.63%
cumulative
total
return
for
the
six
months
under
review.
In
comparison,
the
Fund’s
benchmark,
the
MSCI
U.S.
IMI
Real
Estate
25/50
Index,
which
tracks
the
large,
mid-
and
small-cap
segments
of
the
U.S.
REIT
universe,
posted
a
+11.53%
cumulative
total
return.
2
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
6
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Economic
and
Market
Overview
U.S.
equities,
as
measured
by
the
Standard
&
Poor’s
500
Index,
posted
a
+10.91%
total
return
for
the
six
months
ended
October
31,
2021.
2
Stocks
benefited
from
the
continued
economic
recovery,
the
ongoing
implementation
of
COVID-19
vaccination
programs
and
easing
pandemic
restrictions.
A
rebound
in
corporate
earnings
and
the
U.S.
Senate’s
passage
of
a
bipartisan
infrastructure
bill
further
bolstered
investor
sentiment,
helping
equities
to
reach
new
all-time
price
highs
late
in
the
six-month
period.
The
U.S.
economy
continued
to
recover
amid
declining
unemployment,
solid
wage
growth
and
high
business
confidence.
Gross
domestic
product
continued
to
grow
as
strong
consumer
spending
supported
the
economy.
The
ongoing
growth
of
the
economy
led
the
U.S.
to
surpass
its
pre-pandemic
output
in
2021’s
second
quarter.
The
inflation
rate
was
elevated
during
the
six-month
period
amid
increased
demand
and
supply-chain
bottlenecks.
U.S.
consumer
spending
on
goods
remained
strong,
adding
to
pressure
on
the
prices
of
many
products.
A
global
semiconductor
shortage
weighed
on
production
of
automobiles,
leading
to
higher
prices
for
both
new
and
used
vehicles.
Energy
prices
also
rose
amid
higher
fuel
demand
and
supply
constraints,
exacerbated
by
hurricanes
that
hampered
production
in
the
Gulf
Coast
region.
Consequently,
the
personal
consumption
expenditures
index,
a
measure
of
inflation,
rose
dramatically
during
the
period,
representing
the
highest
12-month
increase
in
decades.
The
unemployment
rate
declined
from
6.1%
in
April
2021
to
4.6%
in
October
2021
as
job
openings
increased,
but
a
relative
lack
of
available
workers
fueled
wage
growth,
adding
to
some
investors’
inflation
concerns.
Portfolio
Composition
10/31/21
%
of
Total
Net
Assets
Specialized
REITs
33.9%
Residential
REITs
17.2%
Industrial
REITs
13.6%
Retail
REITs
11.7%
Office
REITs
8.4%
Health
Care
REITs
7.4%
Hotel
&
Resort
REITs
3.0%
Diversified
REITs
1.8%
Real
Estate
Services
1.5%
Other
1.1%
Short-Term
Investments
&
Other
Net
Assets
0.4%
1.
A
REIT
is
a
type
of
real
estate
company
that
is
dedicated
to
owning
and
usually
operating
income-producing
real
estate
properties
such
as
apartments,
hotels,
industrial
properties,
office
buildings
or
shopping
centers.
Equity
REITs
generally
receive
income
from
rents
received,
are
generally
operated
by
experienced
property
management
teams
and
typically
concentrate
on
a
specific
geographic
region
or
property
type.
2.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Statement
of
Investments
(SOI).
The
SOI
begins
on
page
13
.
Franklin
Real
Estate
Securities
Fund
4
franklintempleton.com
Semiannual
Report
In
an
effort
to
support
the
economy,
the
U.S.
Federal
Reserve
(Fed)
kept
the
federal
funds
target
rate
at
a
record-low
range
of
0.00%–0.25%.
The
Fed
also
maintained
quantitative
easing
measures
aimed
at
ensuring
credit
flows
to
borrowers
and
supporting
credit
markets
with
open-
ended
U.S.
Treasury
and
mortgage
bond
purchasing.
In
its
September
2021
meeting
statement,
the
Fed
indicated
that
it
soon
plans
to
reduce
its
purchases
of
U.S.
Treasury
and
mortgage-backed
securities.
The
Fed
also
noted
that
it
views
inflation
as
partially
transitory,
and
that
further
employment
progress
was
needed
before
the
Fed
would
consider
raising
the
range
for
the
federal
funds
target
rate.
Investment
Strategy
We
are
research-driven,
fundamental
investors.
Our
investment
strategy
is
centered
on
the
belief
that
unsynchronized
economic
activity
within
real
estate
sectors
provides
consistent,
attractive
return
opportunities
in
real
estate
markets.
When
selecting
investments
for
the
Fund’s
portfolio,
we
use
a
bottom-up
security
selection
process
that
incorporates
macro-level
views
in
the
evaluation
process.
In
our
portfolio
construction
process,
we
analyze
individual
stock
and
real
estate
market
fundamentals
and
provide
regional,
property
type
and
company-size
perspectives
in
identifying
local
cyclical
and
thematic
trends
that
highlight
investment
opportunities.
Manager’s
Discussion
For
the
six
months
under
review,
Franklin
Real
Estate
Securities
Fund
outperformed
its
benchmark
due
primarily
to
stock
selection
in
the
office
space,
healthcare
property,
data
centers
and
triple
net
industries.
The
residential
industry
held
two
of
the
Fund’s
top
five
relative
contributors
over
the
period:
Camden
Property
Trust
and
AvalonBay
Communities.
Camden
Property
Trust
is
a
Sunbelt-focused
U.S.
multifamily
real
estate
investment
trust
that
continues
to
be
a
core
holding
for
real
estate
funds.
Our
thesis
is
predicated
on
high-quality
assets
with
attractive
footprints;
proven
operating
platform;
financial
strength;
and
a
seasoned
management
team
that
has
executed
well
over
time.
Operating
trends
today
are
exceptionally
robust
and
in
the
third
quarter
of
2021
the
company
experienced
record
pricing
power
across
its
portfolio,
led
by
the
likes
of
Phoenix,
Tampa
and
South
Florida,
which
benefited
from
strong
migration
from
other
parts
of
the
country.
For
its
most
recent
financial
results,
Camden
upgraded
2021
full-year
guidance
due
to
better-than-expected
operating
performance.
AvalonBay
(AVB)
is
an
owner,
operator
and
developer
of
multifamily
properties
in
the
U.S.
primarily
focused
on
gateway
coastal
cities.
After
a
painful
prior
year
marred
by
a
substantial
reduction
in
effective
rents,
especially
in
AVB’s
urban
core
locations,
such
markets
have
experienced
a
much
faster-than-expected
rebound
in
2021.
As
such,
the
company
has
delivered
results
in
2021
well
in
excess
of
consensus
estimates
and
increased
its
full-year
targets
in
the
process,
driving
outperformance
of
the
shares.
Additionally,
AVB
continues
to
ramp
up
its
development
book
in
light
of
the
improved
market
conditions,
which
bodes
well
for
future
value
creation
per
the
spread
between
the
development
yields
it
achieves
and
stabilized
cap
rates.
In
contrast,
performance
was
led
lower
by
a
position
in
Howard
Hughes
in
the
diversified
industry.
Howard
Hughes
is
a
diversified
real
estate
company
with
its
core
focus
being
the
development
of
residential
and
commercial
land
in
master
planned
communities
located
in
Las
Vegas,
Houston,
and
Columbia,
Maryland.
The
master
planned
community
segment
has
experienced
record
profitability
in
2021
amid
strength
in
the
housing
market,
driving
increased
homebuilder
demand
for
land.
Despite
this
strength,
shares
have
lagged
in
2021,
most
likely
due
to
supply
chain
concerns
as
it
relates
to
homebuilding
activity.
Exposure
to
the
Houston
office
market,
which
continued
to
experience
negative
net
absorption,
also
proved
adverse.
We
remain
constructive
on
Howard
Hughes
longer-term,
given
positive
trends
in
housing
demand
as
well
as
its
specific
geographic
Top
10
Holdings
10/31/21
Company
Sub-Industry
%
of
Total
Net
Assets
a
a
Prologis,
Inc.
9.0%
Industrial
REITs
American
Tower
Corp.
7.0%
Specialized
REITs
Equinix
,
Inc.
6.7%
Specialized
REITs
SBA
Communications
Corp.
4.9%
Specialized
REITs
Public
Storage
4.5%
Specialized
REITs
AvalonBay
Communities,
Inc.
4.2%
Residential
REITs
Crown
Castle
International
Corp.
4.0%
Specialized
REITs
Alexandria
Real
Estate
Equities,
Inc.
3.6%
Office
REITs
Healthpeak
Properties,
Inc.
3.4%
Health
Care
REITs
Realty
Income
Corp.
3.4%
Retail
REITs
Franklin
Real
Estate
Securities
Fund
5
franklintempleton.com
Semiannual
Report
footprint,
which
continues
to
benefit
from
out-of-state
migration.
We
also
think
that
the
company’s
shares
trade
at
a
significant
discount
to
our
estimate
of
net
asset
value.
Elsewhere,
integrated
timber,
land
and
forest
products
company
Weyerhaeuser
pressured
results
in
the
timber
industry.
Weyerhaeuser
owns
approximately
11
million
acres
of
timberlands
in
North
America
and
35
manufacturing
facilities
where
it
produces
wood
products
including
lumber,
structural
panels
and
other
specialty
products.
Lumber
and
OSB
(oriented
strand
board)
pricing
have
experienced
unprecedented
volatility
in
2021,
and
after
a
record
surge
in
the
first
half
of
the
year
(and
record
profits
for
Weyerhaeuser’s
wood
products
division),
such
prices
then
declined
rapidly
amid
the
expected
supply
response
and
a
softening
in
demand,
especially
from
the
do-it-yourself
repair
and
remodel
market.
This
sent
Weyerhaeuser
shares
lower
in
light
of
the
sequential
decline
in
profitability
experienced
in
the
third
quarter.
We
remain
constructive
on
Weyerhaeuser
longer
term,
given
trends
in
housing
and
the
overall
strength
of
its
business.
The
company
also
practices
sustainability
with
respect
to
mounting
ESG
(environmental,
social
and
governance)
considerations.
Thank
you
for
your
continued
participation
in
Franklin
Real
Estate
Securities
Fund.
We
look
forward
to
serving
your
future
investment
needs.
J.
Blair
Schmicker,
CFA
Daniel
Scher
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
October
31,
2021,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Performance
Summary
as
of
October
31,
2021
Franklin
Real
Estate
Securities
Fund
6
franklintempleton.com
Semiannual
Report
The
performance
table
does
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
10
/31
/21
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A
:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
1
Average
Annual
Total
Return
2
–
A
3
6-Month
+12.63%
+6.45%
1-Year
+43.00%
+35.14%
5-Year
+58.51%
+8.42%
10-Year
+161.38%
+9.47%
Advisor
6-Month
+12.79%
+12.79%
1-Year
+43.37%
+43.37%
5-Year
+60.54%
+9.93%
10-Year
+168.20%
+10.37%
See
page
7
for
Performance
Summary
footnotes.
Franklin
Real
Estate
Securities
Fund
Performance
Summary
7
franklintempleton.com
Semiannual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
The
Fund’s
concentration
in
real
estate
securities
involves
special
risks,
such
as
declines
in
the
value
of
real
estate
and
increased
susceptibility
to
adverse
economic
or
regulatory
developments
affecting
the
sector.
The
Fund’s
investments
in
REITs
involve
additional
risks;
since
REITs
typically
are
invested
in
a
limited
number
of
projects
or
in
a
particular
market
segment,
they
are
more
susceptible
to
adverse
developments
affecting
a
single
project
or
market
segment
than
more
broadly
diversified
investments.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
1.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
2.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
3.
Prior
to
9/10/18,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
4.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(5/1/21–10/31/21)
Share
Class
Net
Investment
Income
A
$0.0386
C
–
R6
$0.0661
Advisor
$0.0516
Total
Annual
Operating
Expenses
4
Share
Class
A
1.07%
Advisor
0.82%
Your
Fund’s
Expenses
Franklin
Real
Estate
Securities
Fund
8
franklintempleton.com
Semiannual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value.”
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
184/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
5/1/21
Ending
Account
Value
10/31/21
Expenses
Paid
During
Period
5/1/21–10/31/21
1,2
Ending
Account
Value
10/31/21
Expenses
Paid
During
Period
5/1/21–10/31/21
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$1,126.30
$5.81
$1,019.74
$5.52
1.08%
C
$1,000
$1,121.80
$9.85
$1,015.92
$9.36
1.84%
R6
$1,000
$1,129.20
$3.23
$1,022.18
$3.06
0.60%
Advisor
$1,000
$1,127.90
$4.48
$1,021.00
$4.25
0.84%
Franklin
Real
Estate
Securities
Trust
Financial
Highlights
Franklin
Real
Estate
Securities
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
9
a
Six
Months
Ended
October
31,
2021
(unaudited)
Year
Ended
April
30,
2021
2020
2019
2018
2017
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$20.66
$17.11
$21.69
$19.64
$22.40
$22.65
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.15
0.14
0.33
0.39
0.37
0.24
Net
realized
and
unrealized
gains
(losses)
2.46
4.91
(1.41)
2.69
(0.79)
0.40
Total
from
investment
operations
........
2.61
5.05
(1.08)
3.08
(0.42)
0.64
Less
distributions
from:
Net
investment
income
..............
(0.04)
(0.21)
(0.28)
(0.37)
(0.38)
(0.45)
Net
realized
gains
.................
—
(1.29)
(3.22)
(0.66)
(1.96)
(0.44)
Total
distributions
...................
(0.04)
(1.50)
(3.50)
(1.03)
(2.34)
(0.89)
Net
asset
value,
end
of
period
..........
$23.23
$20.66
$17.11
$21.69
$19.64
$22.40
Total
return
c
.......................
12.63%
30.97%
(6.96)%
16.32%
(2.66)%
2.92%
Ratios
to
average
net
assets
d
Expenses
e
........................
1.08%
1.07%
f
1.00%
f
1.01%
f
1.11%
f
1.00%
f
Net
investment
income
...............
1.37%
0.77%
1.53%
1.89%
1.72%
1.04%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$365,957
$318,415
$281,341
$338,260
$327,085
$333,601
Portfolio
turnover
rate
................
13.31%
19.61%
53.37%
21.85%
19.84%
39.66%
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,
and
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
f
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
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
10
a
Six
Months
Ended
October
31,
2021
(unaudited)
Year
Ended
April
30,
2021
2020
2019
2018
2017
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$19.37
$16.12
$20.66
$18.77
$21.56
$21.86
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.06
—
c
0.16
0.25
0.20
0.07
Net
realized
and
unrealized
gains
(losses)
2.30
4.61
(1.31)
2.54
(0.77)
0.38
Total
from
investment
operations
........
2.36
4.61
(1.15)
2.79
(0.57)
0.45
Less
distributions
from:
Net
investment
income
..............
—
(0.07)
(0.17)
(0.24)
(0.26)
(0.31)
Net
realized
gains
.................
—
(1.29)
(3.22)
(0.66)
(1.96)
(0.44)
Total
distributions
...................
—
(1.36)
(3.39)
(0.90)
(2.22)
(0.75)
Net
asset
value,
end
of
period
..........
$21.73
$19.37
$16.12
$20.66
$18.77
$21.56
Total
return
d
.......................
12.18%
29.96%
(7.62)%
15.49%
(3.43)%
2.14%
Ratios
to
average
net
assets
e
Expenses
f
.........................
1.84%
1.82%
g
1.75%
g
1.76%
g
1.86%
g
1.75%
g
Net
investment
income
...............
0.58%
0.02%
0.78%
1.14%
0.97%
0.29%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$18,718
$23,912
$28,634
$39,619
$61,867
$72,637
Portfolio
turnover
rate
................
13.31%
19.61%
53.37%
21.85%
19.84%
39.66%
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
Amount
rounds
to
less
than
$0.01
per
share.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
g
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.
Semiannual
Report
11
a
Six
Months
Ended
October
31,
2021
(unaudited)
Year
Ended
April
30,
2021
2020
2019
2018
2017
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$21.03
$17.39
$21.97
$19.87
$22.61
$22.83
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.21
0.22
0.41
0.49
0.43
0.35
Net
realized
and
unrealized
gains
(losses)
2.51
4.99
(1.43)
2.72
(0.75)
0.41
Total
from
investment
operations
........
2.72
5.21
(1.02)
3.21
(0.32)
0.76
Less
distributions
from:
Net
investment
income
..............
(0.07)
(0.28)
(0.34)
(0.45)
(0.46)
(0.54)
Net
realized
gains
.................
—
(1.29)
(3.22)
(0.66)
(1.96)
(0.44)
Total
distributions
...................
(0.07)
(1.57)
(3.56)
(1.11)
(2.42)
(0.98)
Net
asset
value,
end
of
period
..........
$23.68
$21.03
$17.39
$21.97
$19.87
$22.61
Total
return
c
.......................
12.92%
31.51%
(6.61)%
16.86%
(2.19)%
3.42%
Ratios
to
average
net
assets
d
Expenses
before
waiver
and
payments
by
affiliates
..........................
0.64%
0.73%
0.81%
0.80%
0.76%
0.55%
Expenses
net
of
waiver
and
payments
by
affiliates
..........................
0.60%
0.67%
e
0.60%
e
0.58%
e
0.60%
e
0.55%
e,f
Net
investment
income
...............
1.85%
1.16%
1.93%
2.32%
2.23%
1.49%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$39,373
$32,831
$3,589
$3,699
$3,794
$2,422
Portfolio
turnover
rate
................
13.31%
19.61%
53.37%
21.85%
19.84%
39.66%
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
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
f
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Real
Estate
Securities
Trust
Financial
Highlights
Franklin
Real
Estate
Securities
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
12
a
Six
Months
Ended
October
31,
2021
(unaudited)
Year
Ended
April
30,
2021
2020
2019
2018
2017
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$20.97
$17.35
$21.93
$19.85
$22.59
$22.83
Income
from
investment
operations
a
:
Net
investment
income
b
.............
0.18
0.19
0.38
0.45
0.44
0.30
Net
realized
and
unrealized
gains
(losses)
2.50
4.98
(1.42)
2.71
(0.81)
0.41
Total
from
investment
operations
........
2.68
5.17
(1.04)
3.16
(0.37)
0.71
Less
distributions
from:
Net
investment
income
..............
(0.05)
(0.26)
(0.32)
(0.42)
(0.41)
(0.51)
Net
realized
gains
.................
—
(1.29)
(3.22)
(0.66)
(1.96)
(0.44)
Total
distributions
...................
(0.05)
(1.55)
(3.54)
(1.08)
(2.37)
(0.95)
Net
asset
value,
end
of
period
..........
$23.60
$20.97
$17.35
$21.93
$19.85
$22.59
Total
return
c
.......................
12.79%
31.27%
(6.7
1)%
16.62%
(2.42)%
3.18%
Ratios
to
average
net
assets
d
Expenses
e
........................
0.84%
0.82%
f
0.75%
f
0.76%
f
0.86%
f
0.75%
f
Net
investment
income
...............
1.60%
1.01%
1.78%
2.14%
1.97%
1.29%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$65,610
$67,206
$65,889
$75,240
$71,000
$50,521
Portfolio
turnover
rate
................
13.31%
19.61%
53.37%
21.85%
19.84%
39.66%
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
is
not
annualized
for
periods
less
than
one
year.
d
Ratios
are
annualized
for
periods
less
than
one
year.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Real
Estate
Securities
Trust
Statement
of
Investments
(unaudited),
October
31,
2021
Franklin
Real
Estate
Securities
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
13
a
a
Country
Shares
a
Value
a
Common
Stocks
99.6%
Diversified
REITs
1.8%
American
Assets
Trust,
Inc.
..............................
United
States
78,124
$
2,955,431
Broadstone
Net
Lease,
Inc.
..............................
United
States
212,797
5,658,272
8,613,703
Health
Care
REITs
7.4%
Healthcare
Trust
of
America,
Inc.,
A
........................
United
States
165,916
5,539,935
Healthpeak
Properties,
Inc.
..............................
United
States
469,546
16,673,578
Welltower
,
Inc.
.......................................
United
States
175,124
14,079,970
36,293,483
Hotel
&
Resort
REITs
3.0%
a
Host
Hotels
&
Resorts,
Inc.
..............................
United
States
358,258
6,029,482
a
Ryman
Hospitality
Properties,
Inc.
.........................
United
States
78,929
6,751,587
a
Summit
Hotel
Properties,
Inc.
............................
United
States
188,164
1,881,640
14,662,709
Hotels,
Resorts
&
Cruise
Lines
0.3%
a
Airbnb,
Inc.,
A
........................................
United
States
7,493
1,278,756
a
Industrial
REITs
13.6%
Americold
Realty
Trust
.................................
United
States
92,684
2,731,397
First
Industrial
Realty
Trust,
Inc.
..........................
United
States
112,785
6,567,471
Prologis,
Inc.
.........................................
United
States
302,879
43,905,340
Rexford
Industrial
Realty,
Inc.
............................
United
States
202,067
13,578,902
66,783,110
Office
REITs
8.4%
Alexandria
Real
Estate
Equities,
Inc.
.......................
United
States
85,898
17,535,218
Boston
Properties,
Inc.
.................................
United
States
40,197
4,567,987
City
Office
REIT,
Inc.
...................................
United
States
193,735
3,675,153
Cousins
Properties,
Inc.
................................
United
States
234,059
9,271,077
Kilroy
Realty
Corp.
....................................
United
States
91,020
6,132,927
41,182,362
Real
Estate
Development
0.8%
a
Howard
Hughes
Corp.
(The)
.............................
United
States
45,538
3,967,726
a
Real
Estate
Services
1.5%
a
CBRE
Group,
Inc.,
A
...................................
United
States
70,278
7,314,534
a
Residential
REITs
17.2%
American
Homes
4
Rent,
A
..............................
United
States
395,418
16,053,971
AvalonBay
Communities,
Inc.
............................
United
States
87,324
20,667,844
Camden
Property
Trust
.................................
United
States
96,949
15,812,382
Equity
LifeStyle
Properties,
Inc.
...........................
United
States
181,965
15,377,862
UDR,
Inc.
...........................................
United
States
295,704
16,420,443
84,332,502
Retail
REITs
11.7%
Kimco
Realty
Corp.
....................................
United
States
246,419
5,569,070
NETSTREIT
Corp.
....................................
United
States
148,184
3,591,980
Realty
Income
Corp.
...................................
United
States
230,662
16,476,187
Regency
Centers
Corp.
.................................
United
States
157,598
11,096,475
RPT
Realty
..........................................
United
States
191,463
2,544,543
Simon
Property
Group,
Inc.
..............................
United
States
58,857
8,627,259
Spirit
Realty
Capital,
Inc.
................................
United
States
193,115
9,449,117
57,354,631
Franklin
Real
Estate
Securities
Trust
Statement
of
Investments
(unaudited)
Franklin
Real
Estate
Securities
Fund
(continued)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
14
See
Abbreviations
on
page
24
.
a
a
Country
Shares
a
Value
a
Common
Stocks
(continued)
Specialized
REITs
33.9%
American
Tower
Corp.
..................................
United
States
121,033
$
34,127,675
Crown
Castle
International
Corp.
..........................
United
States
107,425
19,368,727
CyrusOne
,
Inc.
.......................................
United
States
68,433
5,612,875
Equinix
,
Inc.
.........................................
United
States
39,291
32,889,317
Life
Storage,
Inc.
......................................
United
States
46,628
6,239,293
MGM
Growth
Properties
LLC,
A
...........................
United
States
206,133
8,117,518
Public
Storage
.......................................
United
States
66,640
22,136,475
SBA
Communications
Corp.
.............................
United
States
69,033
23,839,166
Weyerhaeuser
Co.
....................................
United
States
380,160
13,579,315
165,910,361
Total
Common
Stocks
(Cost
$286,518,065)
.....................................
487,693,877
Short
Term
Investments
0.4%
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Money
Market
Funds
0.4%
b,c
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.....
United
States
2,145,379
2,145,379
Total
Money
Market
Funds
(Cost
$2,145,379)
...................................
2,145,379
Total
Short
Term
Investments
(Cost
$2,145,379
)
.................................
2,145,379
a
Total
Investments
(Cost
$288,663,444)
100.0%
..................................
$489,839,256
Other
Assets,
less
Liabilities
(
0.0
)
%
†
..........................................
(181,366)
Net
Assets
100.0%
...........................................................
$489,657,890
†
Rounds
to
less
than
0.1%
of
net
assets.  
a
Non-income
producing.
b
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
c
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
October
31,
2021
(unaudited)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
15
Franklin
Real
Estate
Securities
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$286,518,065
Cost
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
2,145,379
Value
-
Unaffiliated
issuers
..................................................................
$487,693,877
Value
-
Non-controlled
affiliates
(Note
3
f
)
........................................................
2,145,379
Receivables:
Capital
shares
sold
........................................................................
481,846
Dividends
...............................................................................
115,444
European
Union
tax
reclaims
(Note
1
b
)
.........................................................
29,512
Affiliates
................................................................................
32,076
Total
assets
..........................................................................
490,498,134
Liabilities:
Payables:
Capital
shares
redeemed
...................................................................
295,255
Management
fees
.........................................................................
203,217
Distribution
fees
..........................................................................
90,941
Transfer
agent
fees
........................................................................
112,750
Reports
to
shareholders
fees
................................................................
63,203
Professional
fees
.........................................................................
48,671
Trustees'
fees
and
expenses
.................................................................
8,215
Accrued
expenses
and
other
liabilities
...........................................................
17,992
Total
liabilities
.........................................................................
840,244
Net
assets,
at
value
.................................................................
$489,657,890
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$276,033,563
Total
distributable
earnings
(losses)
.............................................................
213,624,327
Net
assets,
at
value
.................................................................
$489,657,890
Franklin
Real
Estate
Securities
Fund
Class
A:
Net
assets,
at
value
.......................................................................
$365,957,330
Shares
outstanding
........................................................................
15,751,359
Net
asset
value
per
share
a
..................................................................
$23.23
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
................................
$24.58
Class
C:
Net
assets,
at
value
.......................................................................
$18,717,568
Shares
outstanding
........................................................................
861,308
Net
asset
value
and
maximum
offering
price
per
share
a
.............................................
$21.73
Class
R6:
Net
assets,
at
value
.......................................................................
$39,372,660
Shares
outstanding
........................................................................
1,662,534
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$23.68
Advisor
Class:
Net
assets,
at
value
.......................................................................
$65,610,332
Shares
outstanding
........................................................................
2,780,005
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$23.60
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Franklin
Real
Estate
Securities
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
October
31,
2021
(unaudited)
franklintempleton.com
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
16
Franklin
Real
Estate
Securities
Fund
Investment
income:
Dividends:
Unaffiliated
issuers
........................................................................
$5,715,323
Non-controlled
affiliates
(Note
3
f
)
.............................................................
156
Total
investment
income
...................................................................
5,715,479
Expenses:
Management
fees
(Note
3
a
)
...................................................................
1,176,212
Distribution
fees:
(Note
3c
)
    Class
A
................................................................................
431,069
    Class
C
................................................................................
110,793
Transfer
agent
fees:
(Note
3e
)
    Class
A
................................................................................
453,484
    Class
C
................................................................................
29,504
    Class
R6
...............................................................................
11,790
    Advisor
Class
............................................................................
83,067
Custodian
fees
(Note
4
)
......................................................................
1,466
Reports
to
shareholders
fees
..................................................................
45,894
Registration
and
filing
fees
....................................................................
50,413
Professional
fees
...........................................................................
40,356
Trustees'
fees
and
expenses
..................................................................
10,203
Other
....................................................................................
11,908
Total
expenses
.........................................................................
2,456,159
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
..............................................
(7,775)
Net
expenses
.........................................................................
2,448,384
Net
investment
income
................................................................
3,267,095
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
13,156,498
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
38,496,539
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
..............................
(654)
Net
change
in
unrealized
appreciation
(depreciation)
............................................
38,495,885
Net
realized
and
unrealized
gain
(loss)
............................................................
51,652,383
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$54,919,478
Franklin
Real
Estate
Securities
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
17
Franklin
Real
Estate
Securities
Fund
Six
Months
Ended
October
31,
2021
(unaudited)
Year
Ended
April
30,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$3,267,095
$3,025,340
Net
realized
gain
(loss)
.................................................
13,156,498
15,567,334
Net
change
in
unrealized
appreciation
(depreciation)
...........................
38,495,885
90,518,396
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
54,919,478
109,111,070
Distributions
to
shareholders:
Class
A
.............................................................
(608,054)
(22,730,266)
Class
C
.............................................................
—
(1,827,864)
Class
R6
............................................................
(108,740)
(1,173,748)
Advisor
Class
........................................................
(143,905)
(4,888,603)
Total
distributions
to
shareholders
..........................................
(860,699)
(30,620,481)
Capital
share
transactions:
(Note
2
)
Class
A
.............................................................
7,718,857
(18,776,518)
Class
C
.............................................................
(7,847,183)
(9,332,002)
Class
R6
............................................................
2,257,121
23,999,112
Advisor
Class
........................................................
(8,893,540)
(11,469,984)
Total
capital
share
transactions
............................................
(6,764,745)
(15,579,392)
Net
increase
(decrease)
in
net
assets
...................................
47,294,034
62,911,197
Net
assets:
Beginning
of
period
.....................................................
442,363,856
379,452,659
End
of
period
..........................................................
$489,657,890
$442,363,856
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
(unaudited)
Franklin
Real
Estate
Securities
Fund
18
franklintempleton.com
Semiannual
Report
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)
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
The
Fund
offers
four
classes
of
shares:
Class
A,
Class
C,
Class
R6
and
Advisor
Class.
Effective
August
2,
2021,
Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis
after
they
have
been
held
for
8
years.
Prior
to
August
2,
2021,
Class
C
shares
converted
to
Class
A
shares
after
a
10-year
holding
period.
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 Fund's
administrator
has
responsibility
for
oversight
of
valuation,
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,
book
values,
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.
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.
As
a
result
of
several
court
cases,
in
certain
countries
across
the
European
Union, the
Fund
filed
additional
tax
reclaims
for
previously
withheld
taxes
on
dividends
earned
in
those
countries
(EU
reclaims). Income
recognized,
if
any,
for
EU
reclaims
is
reflected
as
other
income
in
the
Statement
of
Operations
and
any
related
receivable,
if
any,
is
reflected
as
European
Union
tax
reclaims
in
the
Statement
of
Assets
and
Liabilities.
When
uncertainty
exists
as
to
the
ultimate
resolution
of
these
proceedings,
the
likelihood
of
receipt
of
these
EU
reclaims,
and
the
potential
timing
of
payment,
no
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
(unaudited)
19
franklintempleton.com
Semiannual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
amounts
are
reflected
in
the
financial
statements.
For
U.S.
income
tax
purposes,
EU
reclaims
received
by
the
Fund,
if
any,
reduce
the
amount
of
foreign
taxes
Fund
shareholders
can
use
as
tax
deductions
or credits
on
their
income
tax
returns.
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
October
31,
2021,
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).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
c.
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
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.
d.
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.
e.
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
October
31,
2021,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund’s
shares
were
as
follows:
1.
Organization
and
Significant
Accounting
Policies
(continued)
b.
Income
and
Deferred
Taxes
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
(unaudited)
20
franklintempleton.com
Semiannual
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:
Six
Months
Ended
October
31,
2021
Year
Ended
April
30,
2021
Shares
Amount
Shares
Amount
Class
A
Shares:
Shares
sold
a
...................................
1,393,291
$30,847,506
1,894,947
$34,950,383
Shares
issued
in
reinvestment
of
distributions
..........
25,784
586,067
1,232,022
21,987,838
Shares
redeemed
...............................
(1,079,367)
(23,714,716)
(4,157,045)
(75,714,739)
Net
increase
(decrease)
..........................
339,708
$7,718,857
(1,030,076)
$(18,776,518)
Class
C
Shares:
Shares
sold
...................................
125,214
$2,569,737
160,550
$2,776,472
Shares
issued
in
reinvestment
of
distributions
..........
—
—
108,268
1,812,201
Shares
redeemed
a
..............................
(498,638)
(10,416,920)
(810,908)
(13,920,675)
Net
increase
(decrease)
..........................
(373,424)
$(7,847,183)
(542,090)
$(9,332,002)
Class
R6
Shares:
Shares
sold
...................................
242,358
$5,416,585
1,491,363
$26,583,394
Shares
issued
in
reinvestment
of
distributions
..........
1,751
40,543
29,591
536,694
Shares
redeemed
...............................
(142,498)
(3,200,007)
(166,379)
(3,120,976)
Net
increase
(decrease)
..........................
101,611
$2,257,121
1,354,575
$23,999,112
Advisor
Class
Shares:
Shares
sold
...................................
214,556
$4,791,224
1,161,935
$21,382,950
Shares
issued
in
reinvestment
of
distributions
..........
3,929
90,682
167,142
3,026,574
Shares
redeemed
...............................
(642,984)
(13,775,446)
(1,922,269)
(35,879,508)
Net
increase
(decrease)
..........................
(424,499)
$(8,893,540)
(593,192)
$(11,469,984)
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)
(formerly
Franklin
Templeton
Distributors,
Inc.)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
(unaudited)
21
franklintempleton.com
Semiannual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
a.
Management
Fees
The
Fund
pays
an
investment
management
fee
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund
as
follows:
For
the
period
ended
October
31,
2021,
the
annualized
gross
effective
investment
management
fee
rate
was
0.504%
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.
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
period:
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
Class
A
....................................................................................
0.25%
Class
C
....................................................................................
1.00%
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..............................
$20,262
CDSC
retained
..............................................................................
$815
3.
Transactions
with
Affiliates
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
(unaudited)
22
franklintempleton.com
Semiannual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
e.
Transfer
Agent
Fees
Each
class
of
shares pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
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
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
For
the
period
ended
October
31,
2021,
the
Fund
paid
transfer
agent
fees
of
$577,845
of
which $184,741
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
paid
directly
or
indirectly
by
each
affiliate.
During
the
period
ended
October
31,
2021,
the
Fund
held
investments
in
affiliated
management
investment
companies
as
follows:
g.
Waiver
and
Expense
Reimbursements
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
August
31,
2022.
4.
Expense
Offset
Arrangement
The Fund has
entered
into
an
arrangement
with
its
custodian
whereby
credits
realized
as
a
result
of
uninvested
cash
balances
are
used
to
reduce
a
portion
of
the
Fund's
custodian
expenses.
During
the
period
ended
October
31,
2021,
there
were
no
credits
earned. 
5.
Income
Taxes
At
October
31,
2021,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
for
income
tax
purposes
were
as
follows:
    aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Franklin
Real
Estate
Securities
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.
$2,173,280
$17,925,910
$(17,953,811)
$—
$—
$2,145,379
2,145,379
$156
Total
Affiliated
Securities
...
$2,173,280
$17,925,910
$(17,953,811)
$—
$—
$2,145,379
$156
3.
Transactions
with
Affiliates
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
(unaudited)
23
franklintempleton.com
Semiannual
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
treatment
of
wash
sales.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
October
31,
2021,
aggregated
$61,115,033
and
$65,387,634,
respectively.
7.
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. 
8.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
9.
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
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
4,
2022.
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
shall,
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
period
ended
October
31,
2021,
the Fund
did
not
use
the
Global
Credit
Facility.
10.
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:
Cost
of
investments
..........................................................................
$300,844,466
Unrealized
appreciation
........................................................................
$201,595,831
Unrealized
depreciation
........................................................................
(12,601,041)
Net
unrealized
appreciation
(depreciation)
..........................................................
$188,994,790
5.
Income
Taxes
(continued)
Franklin
Real
Estate
Securities
Trust
Notes
to
Financial
Statements
(unaudited)
24
franklintempleton.com
Semiannual
Report
Franklin
Real
Estate
Securities
Fund
(continued)
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
October
31,
2021,
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
Statement
of
Investments.
11.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
In
January
2021,
the
FASB
issued
ASU
No.
2021-01,
with
further
amendments
to
Topic
848.
The
amendments
in
the
ASUs
provide
optional
temporary
accounting
recognition
and financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021
for
certain
LIBOR
settings
and
2023
for
the
remainder. The
ASUs
are
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022.
Management
has
reviewed
the
requirements
and
believes
the
adoption
of
these
ASUs
will
not
have
a
material
impact
on
the
financial
statements. 
12.
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
10.
Fair
Value
Measurements
(continued)
Franklin
Real
Estate
Securities
Trust
Shareholder
Information
25
franklintempleton.com
Semiannual
Report
Liquidity
Risk
Management
Program-
Funds
no
HLIM
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
FT
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2021,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2020.
The
Program
Administrator
report
concluded
that
(is.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
Proxy
Voting
Policies
and
Procedures
The
Fund’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Fund’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Fund’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Franklin
Real
Estate
Securities
Trust
Shareholder
Information
26
franklintempleton.com
Semiannual
Report
Quarterly
Statement
of
Investments
The
Trust,
on
behalf
of
the
Fund,
files
a
complete
statement
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
the
availability
of,
the
Fund’s
financial
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
financial
reports
(to
the
extent
received
by
mail)
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)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
192
S
12/21
©
2021
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Semiannual
Report
and
Shareholder
Letter
Franklin
Real
Estate
Securities
Fund
Investment
Manager
Distributor
Shareholder
Services
Franklin
Advisers,
Inc.
Franklin
Distributors,
LLC
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
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 13(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.
 
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
 
(2) The audit committee financial expert is Mary C. Choksi and she is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
 
 
Item 4.
Principal Accountant Fees and Services.      
N/A


 
Item 5. Audit Committee
 
of Listed Registrants. N/A
 
 
Item 6. Schedule of Investments. N/A

 
Item 7.  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A
 
 
Item 8.  Portfolio Managers of Closed-End Management Investment Companies. N/A
 
 
Item 9.  Purchases of Equity Securities by Closed-End Management Investment Company and
Affiliated Purchasers. N/A
 
 
Item 10. 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 11. Controls and Procedures.
 
(a) Evaluation of Disclosure Controls and Procedures.
The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
 
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
 
(b) Changes in Internal Controls.
There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
 
 
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                             N/A
 
 
Item 13. Exhibits.
 
(a) (1) Code of Ethics
 
 
(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Jeffrey W. White, Interim Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Jeffrey W. White, Interim Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 
 
 
 
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, thereunto duly authorized.
 
 
 
 
FRANKLIN REAL ESTATE SECURITIES TRUST
 
 
By S\MATTHEW T. HINKLE______________________
      Matthew T. Hinkle
      Chief Executive Officer – Finance and Administration
Date December 23, 2021
 
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\MATTHEW T. HINKLE______________________
      Matthew T. Hinkle
      Chief Executive Officer – Finance and Administration
Date December 23, 2021
 
 
 
By S\Jeffrey W. White________________________
     Jeffrey W. White
     Interim Chief Financial Officer, Chief Accounting Officer and Treasurer
Date December 23, 2021