Core Viewpoint - The second quarter reports of 66 REITs indicate a mixed performance across different sectors, with varying levels of operational pressure and resilience observed in different segments [3][4]. Group 1: Sector Performance Overview - Industrial parks are still under pressure due to new supply and demand contraction, with a need for time to reach a new balance in rental levels and occupancy rates. The revenue for this sector decreased by 1.9% quarter-on-quarter [3][5]. - Logistics and warehousing projects maintained a high occupancy rate of 94.3% in Q2, showing better resilience than expected despite rental pressures, with an average rental decline of only 2% [3][10]. - Affordable rental housing exhibited the least revenue fluctuation in Q2, maintaining stable occupancy and rental levels, while national rental prices continued to decline [3][4]. - Traditional retail faced a 5.5% quarter-on-quarter revenue decline due to seasonal factors, necessitating cautious long-term growth assessments [3][4]. - Highway projects showed significant performance differentiation, with freight traffic performing better than passenger traffic [3][4]. - The municipal environmental sector remained stable, with wastewater treatment fundamentals holding steady and seasonal characteristics in heating demand becoming evident [3][4]. - Energy projects showed improvement in wind resources, particularly offshore wind, outperforming gas and hydropower [3][4]. Group 2: Financial Metrics and Market Trends - The total distributable amount for REITs decreased both year-on-year (down 3.1%) and quarter-on-quarter (down 5.4%), reflecting operational changes across projects [4]. - The market valuation has adjusted, presenting opportunities for quality project allocations, focusing on stable cash flow and potential turnaround opportunities [4][5]. - The logistics sector is expected to see significant new supply in the second half of 2025, with approximately 2.5 million square meters expected, primarily in key urban areas [10][11]. - Demand in the logistics sector is primarily driven by e-commerce and third-party logistics, with significant contributions from seasonal events like the 618 shopping festival [10][11]. Group 3: Regional Insights - In Beijing, the business park market saw no new projects in Q2, with a net absorption of 95,000 square meters, indicating a recovery in demand [6]. - Shanghai's business park market experienced a moderate recovery in demand, particularly from the TMT sector, which accounted for 41% of the total demand [7]. - The vacancy rate in key urban areas varies significantly, with the Pearl River Delta showing a low vacancy rate of 6.15%, while the Beijing-Tianjin-Hebei region has a higher rate of 27.1% [11][15].