Principal Real Estate Income Fund Announces Adoption of Managed Distribution Plan Including Monthly Distributions of $0.11 Per Share and Investor Call

DENVER–(BUSINESS WIRE)–Principal Real Estate Income Fund (the “Fund”), which is traded on the
New York Stock Exchange under the symbol “PGZ,” announced today that its
Board of Trustees has approved the adoption of a managed distribution
plan whereby the Fund will, beginning in October 2017, make monthly
distributions to common shareholders set initially at a fixed monthly
rate of $0.11 per common share. This information updates and supersedes
information provided in the press release dated August 7, 2017,
regarding the Fund’s distribution for October, 2017. The managed
distribution plan represents a reduction from the Fund’s recent
distributions of $0.145 per common share. This reduction is due to
proceeds from maturing bonds being reinvested in a lower yield
environment. Based on the Fund’s current share price of $19.15 as of
market close on September 12, 2017, the distributions represent an
approximate annualized distribution rate of 6.89%.

The following dates apply to the distributions declared:

Ex Date       Record Date       Payable Date
October 12, 2017       October 13, 2017       October 26, 2017
November 16, 2017       November 17, 2017       November 30, 2017
December 14, 2017       December 15, 2017       December 28, 2017
January 11, 2018       January 12, 2018       January 25, 2018
           

A call will be held to provide an update on the Fund:

September 26, 2017
4:15pm ET
Dial in: 866-395-6628
Access
code: 86021413

The primary purpose of the managed distribution plan is to provide
shareholders with a constant, but not guaranteed, fixed distribution and
is intended to narrow the discount between the market price and the NAV
of the Fund’s common shares, but there is no assurance that the plan
will be successful in doing so.

Under the managed distribution plan, to the extent that sufficient
investment income is not available on a monthly basis, the Fund’s
distributions may consist of long-term capital gains and/or return of
capital in order to maintain the distribution rate. Return of capital
includes distributions paid by the Fund in excess of its net investment
income and such excess is distributed from the Fund’s assets. Investors
should not make any conclusions about the Fund’s investment performance
from the amount of the Fund’s distributions or from the terms of the
Fund’s managed distribution plan.

Shareholders will receive a notice in connection with each distribution
that will disclose the amounts and sources of income for the
distribution. Information reported in the notice to shareholders are
only estimates and are not being provided for tax reporting purposes.
Shareholders should refer to Form 1099-DIV for the character and amount
of distributions for income tax reporting purposes.

The Board may amend the terms of the plan or terminate the plan at any
time without prior notice to the Fund’s shareholders. The amendment or
termination of the managed distribution plan could have an adverse
effect on the market price of the Fund’s common shares.

RISKS

_____________________

This press release is not for tax reporting purposes but is being
provided to announce the amount of the Fund’s distributions. In early
2018, after definitive information is available, the Fund will send
shareholders a Form 1099-DIV, if applicable, specifying how the
distributions paid by the Fund during the prior calendar year should be
characterized for purposes of reporting the distributions on a
shareholder’s tax return (e.g., ordinary income, long-term capital gain
or return of capital). An investment in the Fund is not appropriate for
all investors and is not intended to be a complete investment program.
The Fund is designed as a long-term investment and not as a trading
vehicle.

Investing in the Fund involves risks, including the risk that you may
receive little or no return on your investment or that you may lose part
or even all of your investment and exposure to below-investment grade
investments (i.e., “junk bonds”). The Fund’s net asset value will vary
and its distribution rate may vary and both may be affected by numerous
factors, including changes in the market spread over a specified
benchmark, market interest rates and performance of the broader equity
markets. Fluctuations in net asset value may be magnified as a result of
the Fund’s use of leverage. Therefore, before investing you should
carefully consider the risks that you assume when you invest in the
Fund’s common shares.

Securities backed by commercial real estate assets are subject to
market risks similar to those of direct ownership of commercial real
estate assets including, but not limited to, declines in the value of
real estate, declines in rental or occupancy rates and risks related to
general and local economic conditions.

The Fund’s investment objectives and policies are not designed to
seek to return the initial investment to investors that purchase shares.

Sources of distributions to shareholders may include net investment
income, net realized short-term capital gains, net realized long-term
capital gains and return of capital. The actual amounts and sources of
the amounts for tax reporting purposes will depend upon the Fund’s
investment experience during the remainder of its fiscal year and may be
subject to changes based on tax regulations. If a distribution includes
anything other than net investment income, the fund provides a Section
19(a) notice of the best estimate of its distribution sources at that
time, available at
www.principalcef.com.
These estimates may not match the final tax characterization (for the
full year’s distributions) contained in shareholders’ 1099-DIV forms
after the end of the year. The rate is the monthly distribution per
share times 12, divided by the end of month market price. Past
performance is not a guarantee of future results.

An investor should consider investment objectives, risks, charges
and expenses carefully before investing. To obtain a prospectus, annual
report or semi-annual report which contains this and other information
visit
www.principalcef.com
or call 855.838.9485.
Please read them carefully before
investing
.

Shares of closed-end investment companies frequently trade at a
discount from their net asset value and initial offering prices.

NOT FDIC INSURED | May Lose Value | No Bank Guarantee

The Fund is a closed-end fund and does not continuously issue shares for
sale as open-end mutual funds do. Since the initial public offering, the
Fund now trades in the secondary market. Investors wishing to buy or
sell shares need to place orders through an intermediary or broker. The
share price of a closed-end fund is based on the market’s value.

ALPS Advisors, Inc. is the investment adviser to the Fund.

Principal Real Estate Investors LLC is the investment sub-adviser to the
Fund. Principal Real Estate Investors LLC is not affiliated with ALPS
Advisors, Inc. or any of its affiliates.

ALPS Portfolio Solutions Distributor, Inc. is the FINRA Member firm.

About ALPS

ALPS provides customized asset servicing and asset gathering solutions
to the financial services community through an entrepreneurial culture
based on the commitment to “Do Things Right.” Founded in 1985, ALPS
continues to actively promote all of its various business segments, from
asset servicing through ALPS Fund Services, Inc. to asset gathering
through ALPS Distributors, Inc. and ALPS Advisors, Inc. Headquartered in
Denver, with offices in Boston, New York, Seattle, and Toronto, ALPS, a
wholly-owned subsidiary of DST Systems, Inc., today represents more than
400 employees, over 200 clients, and an executive team that has been in
place for more than 18 years. For more information about ALPS and its
services, visit www.alpsinc.com.
Information about ALPS products is available at www.alpsfunds.com.

About Principal Real Estate Investors

Principal Real Estate Investors manages or sub-advises $71.8 billion in
commercial real estate assets, as of December 31, 2016. The firm’s real
estate capabilities include both public and private equity and debt
investment alternatives. Principal Real Estate Investors is the
dedicated real estate group of Principal Global Investors, a diversified
asset management organization and a member of the Principal Financial
Group®.

Contacts

ALPS Advisors, Inc.
Patricia Lobato, 720-917-0644
www.alpsinc.com
or
Principal
Real Estate Investors

Jaime Naig, 515-247-0798
naig.jaime@principal.com