No, there is no need to inform the editor of this. However, since I imagine you do not have much experience with receiving and writing reports, you should discuss the matter with your advisor and also ask for their feedback (or feedback from some other trusted mentor) once you have written your report.
Depending on the field, the expectation may be that you should ask permission from the editor first before showing your report to anyone.* I don't know what the conventions are in physics.
The question you should ask yourself is whether you are willing to invest the time to check the paper in detail. You say that parts of the paper lie outside of your current expertise. This should be okay as long as you treat this as a learning opportunity and invest some time learning about the techniques used in the paper. Alternatively, if there is a small part of the paper that you could not check due to your lack of expertise, then you need to state this explicitly in your report ("results A and B are correct, but I was unable to verify result C, as it lies outside of my area of expertise"). If the part of the paper that you are unable to check for yourself is significant, you should probably decline to write a review (but discuss this with your advisor first).
Footnote*: In my opinion, minor transgressions of this principle done in good faith in the form of running a largely positive review by one's Ph.D. advisor to check that it is clearly and professionally written and has all the information that the editor needs are okay to do without having to bother the editor about it, but others may disagree.