Core Insights - The Monetary Authority of Singapore (MAS) is injecting S$5 billion into the equity market to enhance liquidity and attract investors [1] - Real Estate Investment Trusts (REITs) are expected to benefit from this liquidity push, particularly four established names with strong fundamentals [1] Group 1: Suntec REIT - Suntec REIT owns a diversified portfolio of office and retail properties across Singapore, Australia, and the UK, and has historically traded at a discount during weak market conditions [2] - Committed occupancy rates are strong at 98.5% for Singapore offices and 99.3% for retail, with robust rental reversion rates of 8.5% for Singapore offices and 8.6% for retail [3] - Distribution per unit (DPU) for 3Q2025 increased by 12.5% year on year to S$0.01778, supported by lower financing costs and improved performance [4] Group 2: Keppel REIT - Keppel REIT holds a portfolio of Grade A offices in Singapore, Australia, Japan, and South Korea, with strong rental reversions supported by resilient leasing demand [5] - Committed occupancy increased to 96.3%, while rental reversions for the nine months ended September 2025 were strong at 12% [6] - The REIT trades at a price-to-NAV ratio of around 0.86x, indicating market concerns over near-term distribution growth despite solid operational fundamentals [7] Group 3: ESR-LOGOS REIT - ESR-LOGOS REIT owns industrial and logistics properties across Singapore, Australia, and Japan, with a focus on high-demand sectors driven by e-commerce growth [8] - Occupancy stood at 90.3%, reflecting successful lease-up efforts, and the average cost of debt declined to 3.40% per annum [9] - The REIT is executing a "4R" strategy to enhance portfolio quality through capital recycling [10] Group 4: CapitaLand India Trust - CapitaLand India Trust provides exposure to India's IT and business park sectors, with committed occupancy at 91% and strong rental reversions of 15% for the quarter [11][12] - Gearing improved to 40.9%, reflecting modest deleveraging after divesting non-core assets [12] - The average cost of debt is 5.8%, with a significant portion of borrowings on fixed rates [13] Group 5: Market Implications - The S$5 billion liquidity push is expected to lift the broader REIT sector, potentially narrowing valuation discounts and increasing institutional participation [15] - Focus on quality REITs with healthy balance sheets and stable distributions is recommended, as enhanced liquidity may provide tailwinds for well-managed trusts [16]

Core Viewpoint - Yuexiu Real Estate Investment Trust (Yuexiu REIT) reported a total revenue of approximately 966 million yuan for the first half of 2025, reflecting a year-on-year decrease of 6.6% [2] - Despite the challenging market environment, Yuexiu REIT demonstrated strong risk resilience and strategic management to stabilize its operational fundamentals [2][6] Financial Performance - The net property income for the first half of 2025 was approximately 679 million yuan, down 8.6% year-on-year [2] - The total mid-term distribution amounted to about 170 million yuan, with a distribution per unit of approximately 0.0333 yuan, resulting in a distribution yield of about 4.21% based on the closing price of 0.87 HKD per unit on June 30 [2] - The average financing cost for the first half of 2025 was 4.03 billion yuan, a decrease of 13.5% year-on-year, saving approximately 63 million yuan compared to the same period last year [4][5] Property Portfolio - As of June 30, 2025, Yuexiu REIT's property portfolio included 10 properties with a total ownership area of approximately 1.184 million square meters and a total property valuation of about 41.889 billion yuan [2] - The office sector remained the primary revenue contributor, generating 532 million yuan, accounting for 55% of total revenue [3] - The major income source was the Guojin Center in Guangzhou, contributing 50.3% of total revenue [3] Strategic Initiatives - Yuexiu REIT has focused on enhancing its "four-dimensional capabilities"—product strength, leasing strength, operational strength, and service strength—to capture development opportunities across various sectors [3] - A specialized team was established to prioritize stabilizing occupancy rates and optimizing tenant structures by introducing renovated units and small-sized units [4] Market Outlook - Looking ahead to the second half of 2025, Yuexiu REIT plans to adopt a cautiously optimistic approach, focusing on steady operations and enhancing asset value to address external uncertainties [6]

Investment Rating - The report initiates coverage on Link Real Estate Investment Trust (0823 HK) with a "Buy" rating and a target price of HKD 50.59 [1][8] Core Views - Link REIT is the first listed REIT in Hong Kong, focusing on essential consumer scenarios with a total asset valuation of approximately HKD 225.8 billion. The annualized return for unit holders since listing is 10.9%, highlighting its high yield and stable growth characteristics. Factors such as RMB appreciation, population recovery, Federal Reserve rate cuts, and inclusion in the Stock Connect are expected to drive valuation recovery [1][19][24]. Summary by Sections Investment Highlights - The report emphasizes that the appreciation of the RMB and the recovery of the resident population are likely to boost the Hong Kong retail sector, creating a favorable environment for local retail recovery [2][20]. - The widening dividend yield spread and expectations of interest rate cuts by the Federal Reserve enhance Link REIT's investment appeal, with the current yield spread at 204 basis points, above the historical average of 187 basis points [3][21]. - The potential inclusion in the Stock Connect could attract long-term funds and increase demand for Link REIT, which has a strong focus on essential consumer assets and a robust ability to withstand economic cycles [3][22]. Differentiation from Market Views - The report argues that concerns regarding the Hong Kong retail sector's performance are manageable, with the stock price having corrected approximately 44% from its 2019 peak, indicating that pessimistic expectations are largely priced in. The report suggests that the market has not fully priced in the positive impacts of RMB appreciation, population recovery, and potential Federal Reserve rate cuts [4][23]. Financial Performance and Valuation - The projected distributable amounts for Link REIT for the fiscal years 2026-2028 are HKD 69.08 billion, HKD 69.82 billion, and HKD 70.52 billion, reflecting a slight decline in 2026 followed by modest growth in subsequent years. The report uses a dividend discount model for valuation, arriving at a target price of HKD 50.59 based on a long-term dividend growth rate of 0.5% [5][19].

Group 1: FedEx - FedEx announced a dividend increase of $0.28 (5%) to $5.80 per share, effective July 8, with a yield of 2.6% [4][8] - The company reported a slight year-over-year revenue increase to over $22 billion, but a 12% rise in non-GAAP net income to just under $1.1 billion [5] - Despite beating revenue estimates, FedEx's profitability fell short, and management has continually reduced guidance for fiscal 2025, leading to investor caution [6][8] Group 2: Realty Income - Realty Income raised its dividend by a modest 0.2%, resulting in a payout slightly under $0.27 per share, with a yield of 5.6% [9][12] - The company focuses on leasing to stable businesses, such as supermarkets and home improvement stores, and has expanded into new segments and regions [10] - Realty Income's first-quarter revenue increased nearly 10% year-over-year to $1.38 billion, with adjusted funds from operations (AFFO) rising slightly above 10% [11]

Investment Rating - The report maintains a "Buy" rating for Link REIT since March 31, 2023, with a target price of HK$48.00, representing a 17.4% upside from the current price of HK$40.90 [13][21]. Core Insights - Link REIT reported a headline net loss of -HK$8.9 billion for FY25, primarily due to a -HK$15.8 billion markdown in rental properties. However, the underlying profit grew by 13% year-on-year to HK$7 billion, aligning with expectations [1]. - The overall revenue for Link REIT increased by 4.8% year-on-year to HK$14.223 billion, with a notable contribution from non-rental ancillary income, which rose by 16% year-on-year [1][23]. - The rental portfolio valuation was marked down by 4.7% half-on-half to HK$226 billion, reflecting a 9.2% decline from its peak at the end of FY23 [2][23]. - Management anticipates ongoing pressure on rental reversion, guiding for a low-to-mid single-digit percentage decline in FY26E [18][22]. Summary by Sections Financial Performance - Link REIT's total revenue for FY25 was HK$14.223 billion, with a year-on-year growth of 4.8%. The revenue growth is expected to moderate to 3.2% in the second half of FY25 [1][23]. - The net property income (NPI) grew by 5.5% year-on-year to HK$10.6 billion, with a margin expansion to 74.7% [1][23]. - The group declared a final dividend per share (DPS) of HK$1.37, a 3.7% increase year-on-year, totaling HK$2.72 for the full year [2][23]. Rental Trends - Tenant sales showed signs of improvement, with a decline of -3% year-on-year in FY25, compared to -4.3% in the first half of FY25 [22]. - The rental reversion for the Hong Kong portfolio was negative at -2.2% for FY25, with management expecting continued challenges in rental reversion amid uncertain macroeconomic conditions [22]. M&A and Strategic Initiatives - Management is actively exploring M&A opportunities under the Link 3.0 strategy, with preparations already in place [19][22]. - The company has a treasury of approximately 17 million units, which could be utilized for funding potential acquisitions [19]. Market Position and Valuation - The stock offers a compelling valuation with a dividend yield of 6.7%, which is above the historical average spread over US treasury rates [21]. - The financial position remains healthy, with a slight increase in the net gearing ratio to 21.5% and an interest coverage ratio improved to 5x [17][22].