Franklin Real Estate Securituies Fund Cl A (FREEX) N-CSRS Certified semi-annual shareholder report (management investment company)

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)

Alison Baur, 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: 10/31/22

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,

2022

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Semiannual

Report

1

SHAREHOLDER

LETTER

Dear

Shareholder:

During

the

six

months

ended

October

31,

2022,

the

U.S.

economy

showed

mixed

results

as

it

continued

to

recover

from

the

COVID-19

pandemic

amid

declining

unemployment

and

rising

wages

and

personal

consumption.

U.S.

gross

domestic

product

(GDP)

contracted

in

2022’s

second

quarter

due

to

declines

in

inventory

and

business

investment

but

grew

in

the

third

quarter

as

the

trade

deficit

narrowed

and

consumer

spending

continued

to

expand.

Inflation

increased

during

the

six-month

period,

influenced

by

pandemic-related

supply-chain

issues,

higher

energy

prices,

Russia’s

invasion

of

Ukraine

and

broader

price

pressures.

To

combat

high

inflation,

the

U.S.

Federal

Reserve

(Fed)

raised

the

federal

funds

rate

at

every

meeting

during

the

six-

month

reporting

period,

increasing

it

to

a

range

of

3.00%–

3.25%

by

period-end.

The

Fed

also

stated

its

intention

to

continue

reducing

its

U.S.

Treasury,

government

agency

debt

and

agency

mortgage-backed

securities

holdings,

and

anticipated

future

federal

funds

rate

increases

would

be

appropriate.

Shortly

after

the

reporting

period,

the

Fed

raised

the

federal

funds

rate

again

by

0.75%

at

its

November

2022

meeting,

increasing

it

to

a

range

of

3.75%–4.00%.

During

the

six-month

period,

investor

concerns

about

inflation,

geopolitics

and

interest

rates

pressured

stock

and

bond

valuations.

In

this

environment,

U.S.

stocks,

as

measured

by

the

Standard

&

Poor’s

®

500

Index,

posted

a

-5.50%

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,

2022,

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

Schedule

of

Investments

9

Financial

Statements

15

Notes

to

Financial

Statements

18

Shareholder

Information

26

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,

2022

.

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

-20.33%

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

-18.68%

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

-5.50%

total

return

for

the

six

months

ended

October

31,

2022.

2

High

inflation,

rising

interest

rates

and

geopolitical

instability

contributed

to

a

sharp

decline

in

equity

prices,

particularly

as

the

period

progressed.

Although

consumer

spending

continued

to

rise,

deteriorating

financial

conditions

negatively

impacted

consumer

sentiment,

which

improved

slightly

at

the

end

of

the

period

after

falling

in

June

2022

to

the

lowest

level

in

over

60

years.

Elevated

inflation

was

a

major

concern

for

both

consumers

and

investors,

as

inflation

accelerated

in

June

2022

to

the

highest

rate

since

1981.

Continued

supply-chain

disruptions,

strong

consumer

demand,

and

volatile

energy

prices

drove

inflation

higher.

Russia’s

invasion

of

Ukraine

also

disrupted

financial

markets

and

led

to

a

rise

in

oil

and

commodity

prices,

although

much

of

that

increase

abated

by

period-end.

The

unemployment

rate

increased

marginally

from

3.6%

in

April

2022

to

3.7%

in

October

2022

given

more

people

entering

the

labor

market,

although

notable

employment

gains

occurred

in

the

leisure

and

hospitality

and

health

care

sectors.

Wage

growth

remained

strong

throughout

the

period,

adding

to

some

investors’

inflation

concerns.

U.S.

gross

domestic

product

expanded

in

2022’s

third

quarter,

recovering

from

two

successive

quarters

of

contraction,

amid

a

narrowing

trade

deficit

and

strong

consumer

spending.

Increased

nonresidential

fixed

investment

and

government

spending

also

contributed

to

the

third-quarter

economic

growth.

Rising

interest

rates

translated

to

higher

borrowing

costs

for

individuals

and

businesses.

Mortgage

rates

reached

the

highest

level

since

2007,

and

new

home

construction

slowed

toward

period-end.

Portfolio

Composition

10/31/22

%

of

Total

Net

Assets

Specialized

REITs

35.8%

Residential

REITs

17.1%

Industrial

REITs

14.4%

Retail

REITs

13.0%

Health

Care

REITs

6.8%

Office

REITs

5.5%

Hotel

&

Resort

REITs

3.9%

Real

Estate

Services

1.6%

Other

1.5%

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

Schedule

of

Investments

(SOI).

The

SOI

begins

on

page

13

.

Franklin

Real

Estate

Securities

Fund

4

franklintempleton.com

Semiannual

Report

In

an

effort

to

control

inflation,

the

U.S.

Federal

Reserve

(Fed)

continued

to

raise

the

federal

funds

target

rate.

The

Fed

raised

the

federal

funds

rate

at

each

of

its

four

meetings

during

the

period

to

end

at

a

range

of

3.00%–

3.25%.

The

Fed

noted

in

its

September

2022

meeting

that

inflation

remained

elevated

amid

robust

job

growth

and

low

unemployment.

Furthermore,

the

Fed

said

it

would

continue

to

reduce

its

bond

holdings,

and

Fed

Chair

Jerome

Powell

indicated

that

reducing

inflation

was

likely

to

require

a

period

of

below-trend

growth.

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-month

period

under

review,

Franklin

Real

Estate

Securities

Fund

underperformed

its

benchmark,

primarily

due

to

stock

selection

in

the

industrial

property

and

healthcare

property

subsectors.

Rising

interest

rates

pressured

the

shares

of

Prologis

and

Rexford

Industrial

Realty

in

the

industrial

property

subsector.

Healthpeak

Properties

and

Welltower

were

leading

detractors

in

the

health

care

property

subsector.

Healthpeak

is

a

diversified

REIT

with

a

concentration

in

life

sciences

lab/office

properties.

The

stock

came

under

pressure

amid

investor

concern

that

the

selloff

in

biotechnology

stocks

would

detrimentally

impact

leasing

in

this

segment.

Welltower

is

also

a

diversified

REIT

with

a

concentration

in

senior

housing

operating

assets.

The

stock

lagged

as

the

COVID

wave

associated

with

the

Omicron

variant

temporarily

impaired

recovering

occupancy

rates.

Turning

to

contributors,

our

avoidance

of

poor-performing

stocks

in

the

real

estate

services

subsector

helped

relative

returns.

The

hotel/resort

subsector

had

a

positive

impact

on

results

stemming

from

our

position

in

Ryman

Hospitality

Properties,

which

benefited

from

a

recovery

in

conventions

and

entertainment

activity

at

its

hotel

properties.

Two

of

our

top

five

contributors

were

from

the

triple

net

subsector—

VICI

Properties

and

Spirit

Realty

Capital.

VICI

is

an

owner

of

gaming,

hospitality

and

entertainment

destinations.

The

company

likely

outperformed

due

to

its

defensive

attributes,

namely

long-term

master

leases

with

operators,

which

provide

for

strong

inflation

protection.

Meanwhile,

Spirit,

an

owner

and

acquirer

of

mostly

free-standing

retail

properties,

has

shown

stability

in

its

operations

and

continues

to

execute

on

accretive

acquisitions.

Elsewhere,

a

top

contributor

of

standalone

returns

was

Digital

Realty

Trust

in

the

data

centers

subsector.

The

company

owns

and

operates

data

center

facilities

in

the

U.S.,

Europe,

Asia,

Canada

and

Australia,

and

provides

hyperscale,

colocation

and

interconnection

services.

We

believe

secular

demand

growth

associated

with

ever-increasing

data

usage

and

the

company’s

tilt

toward

long-term

leases

provides

a

bulwark

of

stability

in

an

increasingly

disheveled

global

economy.

Top

10

Holdings

10/31/22

Company

Sub-Industry

%

of

Total

Net

Assets

a

a

Prologis,

Inc.

8.8%

Industrial

REITs

American

Tower

Corp.

6.7%

Specialized

REITs

Public

Storage

5.9%

Specialized

REITs

Equinix

,

Inc.

5.7%

Specialized

REITs

SBA

Communications

Corp.

4.7%

Specialized

REITs

AvalonBay

Communities,

Inc.

4.1%

Residential

REITs

VICI

Properties,

Inc.

4.0%

Specialized

REITs

Realty

Income

Corp.

4.0%

Retail

REITs

Crown

Castle,

Inc.

3.8%

Specialized

REITs

American

Homes

4

Rent

3.4%

Residential

REITs

Franklin

Real

Estate

Securities

Fund

5

franklintempleton.com

Semiannual

Report

Thank

you

for

your

continued

participation

in

Franklin

Real

Estate

Securities

Fund.

We

look

forward

to

serving

your

future

investment

needs.

Blair

Schmicker,

CFA

Daniel

Scher

Portfolio

Management

Team

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

October

31,

2022,

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,

2022

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

10/31/22

1

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

2

Average

Annual

Total

Return

3

–

A

4

6-Month

-20.33%

-24.72%

1-Year

-20.78%

-25.13%

5-Year

+21.48%

+2.80%

10-Year

+83.40%

+5.65%

Advisor

6-Month

-20.24%

-20.24%

1-Year

-20.62%

-20.62%

5-Year

+23.00%

+4.23%

10-Year

+88.05%

+6.52%

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.

The

manager’s

portfolio

selection

strategy

is

not

solely

based

on

ESG

considerations,

and

therefore

the

issuers

in

which

the

Fund

invests

may

not

be

considered

ESG-focused

companies.

Integrating

ESG

consider-

ations

into

the

investment

process

is

not

a

guarantee

that

better

performance

will

be

achieved.

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.

Russia’s

military

invasion

of

Ukraine

in

February

2022,

the

resulting

responses

by

the

United

States

and

other

countries,

and

the

potential

for

wider

conflict

could

increase

volatility

and

uncertainty

in

the

financial

markets

and

adversely

affect

regional

and

global

economies.

The

United

States

and

other

countries

have

im-

posed

broad-ranging

economic

sanctions

on

Russia

and

certain

Russian

individuals,

banking

entities

and

corporations

as

a

response

to

its

invasion

of

Ukraine.

The

United

States

and

other

countries

have

also

imposed

economic

sanctions

on

Belarus

and

may

impose

sanctions

on

other

countries

that

support

Russia’s

military

invasion.

These

sanctions,

as

well

as

any

other

economic

consequences

related

to

the

invasion,

such

as

additional

sanctions,

boycotts

or

changes

in

consumer

or

purchaser

preferences

or

cyberattacks

on

governments,

companies

or

individuals,

may

further

decrease

the

value

and

liquidity

of

certain

Russian

securities

and

securities

of

issuers

in

other

countries

that

are

subject

to

economic

sanctions

related

to

the

invasion.

1.

The

total

annual

operating

expenses

are

sourced

from

the

Fund's

prospectus

available

at

the

time

of

publication.

Actual

expenses

may

be

higher

and

may

impact

portfolio

returns.

2.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

3.

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.

4.

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%.

5.

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

(5/1/22–10/31/22)

Share

Class

Net

Investment

Income

A

$0.0912

C

$0.0549

R6

$0.1455

Advisor

$0.1161

Total

Annual

Operating

Expenses

5

Share

Class

A

1.11%

Advisor

0.86%

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

5/1/22

Ending

Account

Value

10/31/22

Expenses

Paid

During

Period

5/1/22–10/31/22

1,2

Ending

Account

Value

10/31/22

Expenses

Paid

During

Period

5/1/22–10/31/22

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$796.70

$4.70

$1,019.97

$5.28

1.04%

C

$1,000

$793.60

$8.07

$1,016.20

$9.08

1.79%

R6

$1,000

$798.40

$2.70

$1,022.20

$3.04

0.60%

Advisor

$1,000

$797.60

$3.57

$1,021.24

$4.01

0.79%

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,

2022

(unaudited)

Year

Ended

April

30,

2022

2021

2020

2019

2018

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$21.91

$20.66

$17.11

$21.69

$19.64

$22.40

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.23

0.09

0.14

0.33

0.39

0.37

Net

realized

and

unrealized

gains

(losses)

(4.68)

2.44

4.91

(1.41)

2.69

(0.79)

Total

from

investment

operations

........

(4.45)

2.53

5.05

(1.08)

3.08

(0.42)

Less

distributions

from:

Net

investment

income

..............

(0.09)

(0.18)

(0.21)

(0.28)

(0.37)

(0.38)

Net

realized

gains

.................

—

(1.10)

(1.29)

(3.22)

(0.66)

(1.96)

Total

distributions

...................

(0.09)

(1.28)

(1.50)

(3.50)

(1.03)

(2.34)

Net

asset

value,

end

of

period

..........

$17.37

$21.91

$20.66

$17.11

$21.69

$19.64

Total

return

c

.......................

(20.33)%

11.99%

30.97%

(6.96)%

16.32%

(2.66)%

Ratios

to

average

net

assets

d

Expenses

e

........................

1.04%

f

1.11%

1.07%

f

1.00%

f

1.01%

f

1.11%

f

Net

investment

income

...............

2.34%

0.41%

0.77%

1.53%

1.89%

1.72%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$272,260

$361,133

$318,415

$281,341

$338,260

$327,085

Portfolio

turnover

rate

................

4.61%

22.14%

19.61%

53.37%

21.85%

19.84%

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,

2022

(unaudited)

Year

Ended

April

30,

2022

2021

2020

2019

2018

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$20.39

$19.37

$16.12

$20.66

$18.77

$21.56

Income

from

investment

operations

a

:

Net

investment

income

(loss)

b

........

0.14

(0.08)

—

c

0.16

0.25

0.20

Net

realized

and

unrealized

gains

(losses)

(4.35)

2.29

4.61

(1.31)

2.54

(0.77)

Total

from

investment

operations

........

(4.21)

2.21

4.61

(1.15)

2.79

(0.57)

Less

distributions

from:

Net

investment

income

..............

(0.05)

(0.09)

(0.07)

(0.17)

(0.24)

(0.26)

Net

realized

gains

.................

—

(1.10)

(1.29)

(3.22)

(0.66)

(1.96)

Total

distributions

...................

(0.05)

(1.19)

(1.36)

(3.39)

(0.90)

(2.22)

Net

asset

value,

end

of

period

..........

$16.13

$20.39

$19.37

$16.12

$20.66

$18.77

Total

return

d

.......................

(20.64)%

11.13%

29.96%

(7.62)%

15.49%

(3.43)%

Ratios

to

average

net

assets

e

Expenses

f

.........................

1.79%

g

1.87%

1.82%

g

1.75%

g

1.76%

g

1.86%

g

Net

investment

income

(loss)

..........

1.58%

(0.38)%

0.02%

0.78%

1.14%

0.97%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$10,768

$17,704

$23,912

$28,634

$39,619

$61,867

Portfolio

turnover

rate

................

4.61%

22.14%

19.61%

53.37%

21.85%

19.84%

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,

2022

(unaudited)

Year

Ended

April

30,

2022

2021

2020

2019

2018

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$22.39

$21.03

$17.39

$21.97

$19.87

$22.61

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.28

0.21

0.22

0.41

0.49

0.43

Net

realized

and

unrealized

gains

(losses)

(4.79)

2.49

4.99

(1.43)

2.72

(0.75)

Total

from

investment

operations

........

(4.51)

2.70

5.21

(1.02)

3.21

(0.32)

Less

distributions

from:

Net

investment

income

..............

(0.15)

(0.24)

(0.28)

(0.34)

(0.45)

(0.46)

Net

realized

gains

.................

—

(1.10)

(1.29)

(3.22)

(0.66)

(1.96)

Total

distributions

...................

(0.15)

(1.34)

(1.57)

(3.56)

(1.11)

(2.42)

Net

asset

value,

end

of

period

..........

$17.73

$22.39

$21.03

$17.39

$21.97

$19.87

Total

return

c

.......................

(20.16)%

12.56%

31.51%

(6.61)%

16.86%

(2.19)%

Ratios

to

average

net

assets

d

Expenses

before

waiver

and

payments

by

affiliates

..........................

0.64%

0.63%

0.73%

0.81%

0.80%

0.76%

Expenses

net

of

waiver

and

payments

by

affiliates

..........................

0.60%

e

0.60%

0.67%

e

0.60%

e

0.58%

e

0.60%

e

Net

investment

income

...............

2.78%

0.93%

1.16%

1.93%

2.32%

2.23%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$31,538

$37,871

$32,831

$3,589

$3,699

$3,794

Portfolio

turnover

rate

................

4.61%

22.14%

19.61%

53.37%

21.85%

19.84%

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%.

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,

2022

(unaudited)

Year

Ended

April

30,

2022

2021

2020

2019

2018

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

period)

Net

asset

value,

beginning

of

period

.....

$22.29

$20.97

$17.35

$21.93

$19.85

$22.59

Income

from

investment

operations

a

:

Net

investment

income

b

.............

0.26

0.15

0.19

0.38

0.45

0.44

Net

realized

and

unrealized

gains

(losses)

(4.77)

2.48

4.98

(1.42)

2.71

(0.81)

Total

from

investment

operations

........

(4.51)

2.63

5.17

(1.04)

3.16

(0.37)

Less

distributions

from:

Net

investment

income

..............

(0.12)

(0.21)

(0.26)

(0.32)

(0.42)

(0.41)

Net

realized

gains

.................

—

(1.10)

(1.29)

(3.22)

(0.66)

(1.96)

Total

distributions

...................

(0.12)

(1.31)

(1.55)

(3.54)

(1.08)

(2.37)

Net

asset

value,

end

of

period

..........

$17.66

$22.29

$20.97

$17.35

$21.93

$19.85

Total

return

c

.......................

(20.24)%

12.25%

31.27%

(6.71)%

16.62%

(2.42)%

Ratios

to

average

net

assets

d

Expenses

e

........................

0.79%

f

0.86%

0.82%

f

0.75%

f

0.76%

f

0.86%

f

Net

investment

income

...............

2.59%

0.65%

1.01%

1.78%

2.14%

1.97%

Supplemental

data

Net

assets,

end

of

period

(000’s)

........

$39,913

$63,140

$67,206

$65,889

$75,240

$71,000

Portfolio

turnover

rate

................

4.61%

22.14%

19.61%

53.37%

21.85%

19.84%

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

Schedule

of

Investments

(unaudited),

October

31,

2022

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

0.7%

Broadstone

Net

Lease,

Inc.

..............................

United

States

140,322

$

2,405,119

Health

Care

REITs

6.8%

Healthcare

Realty

Trust,

Inc.

.............................

United

States

192,041

3,904,193

Healthpeak

Properties,

Inc.

..............................

United

States

231,327

5,489,390

Sabra

Health

Care

REIT,

Inc.

............................

United

States

203,853

2,784,632

Welltower,

Inc.

.......................................

United

States

192,516

11,751,177

23,929,392

Hotel

&

Resort

REITs

3.9%

Host

Hotels

&

Resorts,

Inc.

..............................

United

States

438,410

8,277,181

Ryman

Hospitality

Properties,

Inc.

.........................

United

States

63,124

5,612,986

13,890,167

Industrial

REITs

14.4%

Americold

Realty

Trust,

Inc.

..............................

United

States

207,358

5,028,432

First

Industrial

Realty

Trust,

Inc.

..........................

United

States

106,531

5,074,072

Prologis,

Inc.

.........................................

United

States

280,718

31,089,518

Rexford

Industrial

Realty,

Inc.

............................

United

States

180,079

9,954,767

51,146,789

Office

REITs

5.5%

Alexandria

Real

Estate

Equities,

Inc.

.......................

United

States

81,140

11,789,642

Cousins

Properties,

Inc.

................................

United

States

207,696

4,934,857

Kilroy

Realty

Corp.

....................................

United

States

65,376

2,794,170

19,518,669

Real

Estate

Development

0.8%

a

Howard

Hughes

Corp.

(The)

.............................

United

States

44,221

2,712,958

a

Real

Estate

Services

1.6%

a

CBRE

Group,

Inc.,

A

...................................

United

States

80,009

5,675,838

a

Residential

REITs

17.1%

American

Homes

4

Rent,

A

..............................

United

States

373,507

11,929,814

AvalonBay

Communities,

Inc.

............................

United

States

82,488

14,445,298

Camden

Property

Trust

.................................

United

States

74,484

8,606,626

Equity

LifeStyle

Properties,

Inc.

...........................

United

States

184,592

11,806,504

Independence

Realty

Trust,

Inc.

..........................

United

States

189,122

3,169,685

UDR,

Inc.

...........................................

United

States

271,356

10,789,115

60,747,042

Retail

REITs

13.0%

b

NETSTREIT

Corp.

....................................

United

States

166,617

3,135,732

Realty

Income

Corp.

...................................

United

States

227,459

14,163,872

Regency

Centers

Corp.

.................................

United

States

163,753

9,908,694

RPT

Realty

..........................................

United

States

292,641

2,721,561

Simon

Property

Group,

Inc.

..............................

United

States

55,594

6,058,634

SITE

Centers

Corp.

....................................

United

States

249,408

3,087,671

Spirit

Realty

Capital,

Inc.

................................

United

States

182,414

7,083,136

46,159,300

Specialized

REITs

35.8%

American

Tower

Corp.

..................................

United

States

114,332

23,688,447

Crown

Castle,

Inc.

.....................................

United

States

101,473

13,522,292

Digital

Realty

Trust,

Inc.

................................

United

States

41,953

4,205,788

Equinix,

Inc.

.........................................

United

States

35,545

20,134,110

Life

Storage,

Inc.

......................................

United

States

47,288

5,230,526

Franklin

Real

Estate

Securities

Trust

Schedule

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

(continued)

Public

Storage

.......................................

United

States

67,812

$

21,004,767

SBA

Communications

Corp.

.............................

United

States

62,254

16,802,355

VICI

Properties,

Inc.

...................................

United

States

446,858

14,308,393

Weyerhaeuser

Co.

....................................

United

States

254,993

7,886,933

126,783,611

Total

Common

Stocks

(Cost

$264,318,673)

.....................................

352,968,885

Short

Term

Investments

0.2%

a

a

Country

Shares

a

Value

a

a

a

a

a

a

Money

Market

Funds

0.2%

c,d

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

2.86%

.....

United

States

863,719

863,719

Total

Money

Market

Funds

(Cost

$863,719)

.....................................

863,719

Total

Short

Term

Investments

(Cost

$863,719

)

..................................

863,719

a

Total

Investments

(Cost

$265,182,392)

99.8%

...................................

$353,832,604

Other

Assets,

less

Liabilities

0.2%

.............................................

645,846

Net

Assets

100.0%

...........................................................

$354,478,450

a

Non-income

producing.

b

A

portion

or

all

of

the

security

is

on

loan

at

October

31,

2022.

See

Note

1(b).

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

October

31,

2022

(unaudited)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Semiannual

Report

15

Franklin

Real

Estate

Securities

Fund

Class

A:

Net

assets,

at

value

.......................................................................

$272,260,134

Shares

outstanding

........................................................................

15,677,670

Net

asset

value

per

share

a

..................................................................

$17.37

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

94.50%)

................................

$18.38

Class

C:

Net

assets,

at

value

.......................................................................

$10,767,514

Shares

outstanding

........................................................................

667,693

Net

asset

value

and

maximum

offering

price

per

share

a

.............................................

$16.13

Class

R6:

Net

assets,

at

value

.......................................................................

$31,538,016

Shares

outstanding

........................................................................

1,778,582

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$17.73

Advisor

Class:

Net

assets,

at

value

.......................................................................

$39,912,786

Shares

outstanding

........................................................................

2,259,658

Net

asset

value

and

maximum

offering

price

per

share

.............................................

$17.66

Franklin

Real

Estate

Securities

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

...................................................................

$264,318,673

Cost

-

Non-controlled

affiliates

(Note

3

f

)

........................................................

863,719

Value

-

Unaffiliated

issuers

(Includes

securities

loaned

of

$1,215,866)

.................................

$352,968,885

Value

-

Non-controlled

affiliates

(Note

3

f

)

........................................................

863,719

Cash

....................................................................................

109,268

Receivables:

Investment

securities

sold

...................................................................

1,397,579

Capital

shares

sold

........................................................................

81,977

Dividends

and

interest

.....................................................................

68,854

European

Union

tax

reclaims

(Note

1

c

)

.........................................................

22,952

Total

assets

..........................................................................

355,513,234

Liabilities:

Payables:

Capital

shares

redeemed

...................................................................

368,292

Management

fees

.........................................................................

153,198

Distribution

fees

..........................................................................

65,031

Transfer

agent

fees

........................................................................

271,891

Reports

to

shareholders

fees

................................................................

106,241

Trustees'

fees

and

expenses

.................................................................

9,910

Accrued

expenses

and

other

liabilities

...........................................................

60,221

Total

liabilities

.........................................................................

1,034,784

Net

assets,

at

value

.................................................................

$354,478,450

Net

assets

consist

of:

Paid-in

capital

.............................................................................

$268,031,567

Total

distributable

earnings

(losses)

.............................................................

86,446,883

Net

assets,

at

value

.................................................................

$354,478,450

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,

2022

(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

........................................................................

$6,998,728

Non-controlled

affiliates

(Note

3

f

)

.............................................................

14,475

Income

from

securities

loaned:

Unaffiliated

entities

(net

of

fees

and

rebates)

.....................................................

1,831

Non-controlled

affiliates

(Note

3

f

)

.............................................................

170

Total

investment

income

...................................................................

7,015,204

Expenses:

Management

fees

(Note

3

a

)

...................................................................

1,060,514

Distribution

fees:

(Note

3c

)

    Class

A

................................................................................

390,931

    Class

C

................................................................................

71,219

Transfer

agent

fees:

(Note

3e

)

    Class

A

................................................................................

345,618

    Class

C

................................................................................

15,655

    Class

R6

...............................................................................

11,783

    Advisor

Class

............................................................................

59,537

Custodian

fees

(Note

4

)

......................................................................

1,052

Reports

to

shareholders

fees

..................................................................

33,403

Registration

and

filing

fees

....................................................................

41,256

Professional

fees

...........................................................................

28,241

Other

....................................................................................

17,841

Total

expenses

.........................................................................

2,077,050

Expense

reductions

(Note

4

)

...............................................................

(3)

Expenses

waived/paid

by

affiliates

(Note

3

f

and

3

g

)

..............................................

(11,338)

Net

expenses

.........................................................................

2,065,709

Net

investment

income

................................................................

4,949,495

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

......................................................................

(258,813)

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

......................................................................

(100,984,706)

Translation

of

other

assets

and

liabilities

denominated

in

foreign

currencies

..............................

(3,739)

Net

change

in

unrealized

appreciation

(depreciation)

............................................

(100,988,445)

Net

realized

and

unrealized

gain

(loss)

............................................................

(101,247,258)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

..........................................

$(96,297,763)

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,

2022

(unaudited)

Year

Ended

April

30,

2022

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

.................................................

$4,949,495

$2,164,758

Net

realized

gain

(loss)

.................................................

(258,813)

23,329,090

Net

change

in

unrealized

appreciation

(depreciation)

...........................

(100,988,445)

26,950,356

Net

increase

(decrease)

in

net

assets

resulting

from

operations

................

(96,297,763)

52,444,204

Distributions

to

shareholders:

Class

A

.............................................................

(1,452,583)

(20,337,420)

Class

C

.............................................................

(40,822)

(1,008,188)

Class

R6

............................................................

(256,229)

(2,252,095)

Advisor

Class

........................................................

(321,720)

(3,642,159)

Total

distributions

to

shareholders

..........................................

(2,071,354)

(27,239,862)

Capital

share

transactions:

(Note

2

)

Class

A

.............................................................

(15,122,132)

24,750,920

Class

C

.............................................................

(3,461,026)

(7,699,349)

Class

R6

............................................................

1,788,295

2,863,851

Advisor

Class

........................................................

(10,204,516)

(7,636,674)

Total

capital

share

transactions

............................................

(26,999,379)

12,278,748

Net

increase

(decrease)

in

net

assets

...................................

(125,368,496)

37,483,090

Net

assets:

Beginning

of

period

.....................................................

479,846,946

442,363,856

End

of

period

..........................................................

$354,478,450

$479,846,946

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.

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 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.

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.

Additionally,

at

October

31,

2022,

the

Fund

held

$1,223,787

in

U.S.

Government

and

Agency

securities

as

collateral.

These

securities

are

held

as

collateral

in

segregated

accounts

with

the

Fund’s

custodian.

The

Fund

cannot

repledge

or

resell

these

securities

held

as

collateral.

As

such,

the

non-cash

collateral

is

excluded

from

the

Statement

of

Assets

and

Liabilities.

The

Fund

may

receive

income

from

the

investment

of

cash

collateral,

in

addition

to

lending

fees

and

rebates

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

Franklin

Real

Estate

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

19

franklintempleton.com

Semiannual

Report

Franklin

Real

Estate

Securities

Fund

(continued)

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.

c.

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.

Any

fees

associated

with

these

filings

are

reflected

in

other

expenses

in

the

Statement

of

Operations.

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

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,

2022,

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. 

d.

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.

e.

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

1.

Organization

and

Significant

Accounting

Policies

(continued)

b.

Securities

Lending

(continued)

Franklin

Real

Estate

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

20

franklintempleton.com

Semiannual

Report

Franklin

Real

Estate

Securities

Fund

(continued)

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.

f.

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,

2022,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Fund’s

shares

were

as

follows:

Six

Months

Ended

October

31,

2022

Year

Ended

April

30,

2022

Shares

Amount

Shares

Amount

Class

A

Shares:

Shares

sold

a

...................................

612,663

$11,796,356

2,789,991

$62,678,839

Shares

issued

in

reinvestment

of

distributions

..........

77,025

1,406,486

860,916

19,668,835

Shares

redeemed

...............................

(1,493,611)

(28,324,974)

(2,580,965)

(57,596,754)

Net

increase

(decrease)

..........................

(803,923)

$(15,122,132)

1,069,942

$24,750,920

Class

C

Shares:

Shares

sold

...................................

32,946

$592,947

220,838

$4,560,881

Shares

issued

in

reinvestment

of

distributions

..........

2,379

40,376

46,898

999,863

Shares

redeemed

a

..............................

(235,946)

(4,094,349)

(634,154)

(13,260,093)

Net

increase

(decrease)

..........................

(200,621)

$(3,461,026)

(366,418)

$(7,699,349)

Class

R6

Shares:

Shares

sold

...................................

255,724

$5,084,888

507,676

$11,522,861

Shares

issued

in

reinvestment

of

distributions

..........

6,404

119,543

37,859

881,860

Shares

redeemed

...............................

(175,274)

(3,416,136)

(414,730)

(9,540,870)

Net

increase

(decrease)

..........................

86,854

$1,788,295

130,805

$2,863,851

Advisor

Class

Shares:

Shares

sold

...................................

159,633

$3,134,294

424,035

$9,575,910

Shares

issued

in

reinvestment

of

distributions

..........

10,951

203,464

98,657

2,290,254

Shares

redeemed

...............................

(744,025)

(13,542,274)

(894,097)

(19,502,838)

Net

increase

(decrease)

..........................

(573,441)

$(10,204,516)

(371,405)

$(7,636,674)

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

1.

Organization

and

Significant

Accounting

Policies

(continued)

e.

Accounting

Estimates

(continued)

Franklin

Real

Estate

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

21

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:

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

period

ended

October

31,

2022,

the

annualized

gross

effective

investment

management

fee

rate

was 0.511%

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:

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

Class

A

....................................................................................

0.25%

Class

C

....................................................................................

1.00%

Franklin

Real

Estate

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

22

franklintempleton.com

Semiannual

Report

Franklin

Real

Estate

Securities

Fund

(continued)

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:

e.

Transfer

Agent

Fees

Each

class

of

shares pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

Effective

October

1,

2022,

the

fees

are

based

on

an

annualized

asset

based

fee

of

0.016%

plus

a

reduced

transaction

based

fee.

Prior

to

October

1,

2022,

the

fees

were

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,

2022,

the

Fund

paid

transfer

agent

fees

of

$432,593,

of

which

$142,474

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,

2022,

the

Fund

held

investments

in

affiliated

management

investment

companies

as

follows:

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

..............................

$11,491

CDSC

retained

..............................................................................

$1,472

    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,

2.86%

.

$

25

$

25,020,869

$

(24,157,175)

$

—

$

—

$

863,719

863,719

$

14,475

Non-Controlled

Affiliates

Income

from

securities

loaned

Institutional

Fiduciary

Trust

-

Money

Market

Portfolio,

2.86%

.

$325,000

$791,000

$(1,116,000)

$—

$—

$—

—

$170

Total

Affiliated

Securities

...

$325,025

$25,811,869

$(25,273,175)

$—

$—

$863,719

$14,645

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)

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,

2023.

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,

2022,

the

custodian

fees

were

reduced

as

noted

in

the

Statement

of

Operations. 

5.

Income

Taxes

At

October

31,

2022,

the

cost

of

investments

and

net

unrealized

appreciation

(depreciation)

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

corporate

actions

and

wash

sales.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities) for

the

period

ended

October

31,

2022,

aggregated

$19,059,109 

and

$42,870,307,

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.

Geopolitical

Risk 

On

February

24,

2022,

Russia

engaged

in

military

actions

in

the

sovereign

territory

of

Ukraine.

The

current

political

and

financial

uncertainty

surrounding

Russia

and

Ukraine

may

increase

market

volatility

and

the

economic

risk

of

investing

in

securities

in

these

countries

and

may

also

cause

uncertainty

for

the

global

economy

and

broader

financial

markets.

The

ultimate

fallout

and

long-term

impact

from

these

events

are

not

known.

The

Fund

will

continue

to

assess

the

impact

on

valuations

and

liquidity

and

will

take

any

potential

actions

needed

in

accordance

with

procedures

approved

by

the

Board.

Cost

of

investments

..........................................................................

$277,333,745

Unrealized

appreciation

........................................................................

$102,984,841

Unrealized

depreciation

........................................................................

(26,485,982)

Net

unrealized

appreciation

(depreciation)

..........................................................

$76,498,859

3.

Transactions

with

Affiliates

(continued)

Franklin

Real

Estate

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

24

franklintempleton.com

Semiannual

Report

Franklin

Real

Estate

Securities

Fund

(continued)

9.

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.

10.

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

3,

2023.

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,

2022,

the Fund

did

not

use

the

Global

Credit

Facility.

11.

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

October

31,

2022,

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.

12.

New

Accounting

Pronouncements

In June

2022,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2022-03,

Fair

Value

Measurement

(Topic

820)

–

Fair

Value

Measurement

of

Equity

Securities

Subject

to

Contractual

Sale

Restrictions.

The

amendments

in

the

ASU

clarify

that

a

contractual

restriction

on

the

sale

of

an

equity

security

is

not

considered

part

of

the

unit

of

account

of

the

equity

security

and,

therefore,

should

not

be

considered

in

measuring

fair

value.

The

ASU

is

effective

for

interim

and

annual

reporting

periods

beginning

after

December

15,

2023,

with

the

option

of

early

adoption.

Management

is

currently

evaluating

the

impact,

if

any,

of

applying

this

ASU.

Franklin

Real

Estate

Securities

Trust

Notes

to

Financial

Statements

(unaudited)

25

franklintempleton.com

Semiannual

Report

Franklin

Real

Estate

Securities

Fund

(continued)

13.

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

Shareholder

Information

26

franklintempleton.com

Semiannual

Report

Liquidity

Risk

Management

Program

Each

of

the

Franklin

Templeton

and

Legg

Mason

Funds

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

Franklin

Templeton

and

Legg

Mason

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Legal,

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

2022,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

for

the

year

ended

December

31,

2021.

The

Program

Administrator

report

concluded

that

(i.)

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

27

franklintempleton.com

Semiannual

Report

Quarterly

Schedule

of

Investments

The

Trust,

on

behalf

of

the

Fund,

files

a

complete

schedule

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

12/22

©

2022

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

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fund’s

investment

goals,

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expenses

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A

prospectus

contains

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and

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information;

please

read

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To

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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

codeofethics

(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 Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

section302

(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.

(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer

section906

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 22, 2022

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 22, 2022

By S\CHRISTOPHER KINGS______________________

      Christopher Kings

      Chief Financial Officer, Chief Accounting Officer and Treasurer

Date  December 22, 2022