Report Summary 1. Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints - The REITs market continued to decline this week, with the park and warehousing logistics sectors leading the decline. The market is still concerned about their pressure on occupancy rates. The Shenyang International Software Park REIT listed on Thursday, showing a dismal performance and breaking its issue price on the first day, which may suppress the market sentiment for subsequent new products. The short - term weak and volatile pattern may continue [2]. - As of November 7, 2025, 18 REITs have been successfully issued this year, with a total issuance scale of 36.34 billion yuan, a year - on - year decrease of 25.8%. This week, 3 first - issued public REITs made new progress [2]. - This week, the CSI REITs Total Return Index closed at 1041.51 points, a decline of 0.40%, underperforming the CSI 300 by 1.22 percentage points and the CSI Dividend by 2.63 percentage points. In terms of project attributes, equity - type REITs fell by 0.84%, while franchise - type REITs rose by 0.15%. In terms of asset types, the consumption, data center, environmental protection and water services, and transportation sectors performed better [2]. - In terms of liquidity, the average daily turnover rates of equity - type and franchise - type REITs this week were 0.60% and 0.45% respectively, down 8.70BP and 0.36BP from last week. The trading volumes were 577 million and 129 million shares respectively, with a week - on - week decrease of 11.78% and 0.79%. The data center sector was the most active [2]. - In terms of valuation, the yields of equity - type and franchise - type REITs according to ChinaBond valuations were 3.89% and 4.07% respectively. The warehousing logistics, transportation, and park sectors ranked among the top three [2]. 3. Summary by Directory 3.1 First - level Market: 3 First - issued Public REITs Made New Progress - As of November 7, 2025, a total of 77 REITs have been issued, with a total issuance scale of 202 billion yuan, a total market value of 220.6 billion yuan, and a circulating market value of 110.9 billion yuan. Among them, there are 55 equity - type REITs and 23 franchise - type REITs [13]. - This week, 3 first - issued REITs made new progress: the CITIC Construction Investment Shenyang International Software Park REIT was listed, the Shanxi Securities Jinzhong Public Investment Ruiyang Heating REIT was under inquiry, and the E Fund Guangxi Beitou Expressway REIT was accepted. There was no new progress in the expansion and fundraising of REITs this week [14][15]. 3.2 Second - level Market: Liquidity Declined This Week 3.2.1 Market Review: The CSI REITs Total Return Index Fell by 0.4% - This week, the CSI REITs Total Return Index closed at 1041.51 points, a decline of 0.4%. It underperformed the CSI 300 by 1.22 percentage points and the CSI Dividend by 2.63 percentage points. The CSI REITs Total Return Index has risen by 7.61% since the beginning of the year, underperforming the CSI 300 by 11.30 percentage points and outperforming the CSI Dividend by 4.54 percentage points [2]. - In terms of project attributes, equity - type REITs fell by 0.84%, while franchise - type REITs rose by 0.15%. In terms of asset types, the consumption (+0.41%), data center (+0.29%), environmental protection and water services (+0.28%), and transportation (+0.26%) sectors performed better [2]. 3.2.2 Liquidity: Both Turnover Rate and Trading Volume Decreased - The average daily turnover rates of equity - type and franchise - type REITs this week were 0.60% and 0.45% respectively, down 8.70BP and 0.36BP from last week. The trading volumes were 577 million and 129 million shares respectively, with a week - on - week decrease of 11.78% and 0.79%. The data center sector was the most active [2]. 3.2.3 Valuation: The Valuation of the Affordable Housing Sector was Relatively High - According to ChinaBond valuations, the yields of equity - type and franchise - type REITs were 3.89% and 4.07% respectively. The warehousing logistics (5.53%), transportation (4.96%), and park (4.63%) sectors ranked among the top three [2]. 3.3 This Week's News and Important Announcements - On November 4, 2025, Li Ming, the vice - chairman of the China Securities Regulatory Commission, said at the 2025 International Financial Leaders Investment Summit that support would be provided to include RMB stock trading counters, REITs, etc. in the Hong Kong Stock Connect [31]. - This week, there were several important announcements, including the release of restricted shares of some REITs and dividend announcements [31].

Group 1 - The analyst has over 10 years of experience researching more than 1000 companies across various sectors including commodities and technology [1] - The focus has shifted from writing a blog to creating a value investing-focused YouTube channel, covering hundreds of companies [1] - The analyst expresses a particular interest in metals and mining stocks, while also being comfortable with consumer discretionary, REITs, and utilities [1]

Core Insights - The current market environment is described as extremely challenging, primarily due to the significant impact of AI-driven trades that have benefitted the "Magnificent 7" stocks, which are noted for their unparalleled innovation capabilities [1] Group 1: Market Environment - The market is facing challenges attributed to the massive AI trade [1] - The "Magnificent 7" stocks have been highlighted for their ability to innovate on a scale that others cannot match [1] Group 2: Analyst Contributions - Leo Nelissen is identified as an analyst focusing on major economic developments related to supply chains, infrastructure, and commodities [1] - The aim of the iREIT®+HOYA Capital team, which includes Nelissen, is to provide insightful analysis and actionable investment ideas, particularly emphasizing dividend growth opportunities [1]

Core Insights - The essence of REITs is that local governments take a one-time cash flow for 20-30 years, leaving the risks to the market [2] - Retail investors are not "landlords" but rather "risk bearers of debt instruments" [2] - The stability of cash flow over 20 years is a myth; instead, REITs are characterized by slow declines and small fluctuations [2] Group 1: Investment Characteristics - 86%-92% of the ownership and operational rights of all listed and under-review REITs are held by local governments, central enterprises, and local state-owned enterprises, with private enterprises only accounting for 10%-14% [2] - REITs primarily serve as tools for central and local state-owned assets to realize future cash flows [2] - The participation of private assets in REITs faces significant barriers, including land acquisition, scale thresholds, and exemptions from state-owned asset transfers [2] Group 2: Market Dynamics - The REITs market is dominated by institutions, with 40% of original equity holders locking their shares, while retail investors only account for 5% of the market but contribute 35% of the trading volume [2] - The proportion of institutional investors is expected to exceed 97% by 2025-2026, indicating a shift in market dynamics [2] - REITs are not simply "stable rental income" but are equity assets that can be leveraged, have time limits, may experience vacancies, and are sensitive to policy changes [2][3] Group 3: Performance Issues - A specific REIT has seen a 16% year-on-year decline in rental rates and a drop in actual rental area by nearly 20%, indicating potential issues with major clients [4] - The rental collection rate has decreased by 6% year-on-year to only 65%, raising concerns about future bad debts [4] - The weighted average lease terms have shown a decline, which is unusual for industrial parks that typically have longer lease durations [4] Group 4: Broader Market Sentiment - Historical performance of certain REITs has shown that perceived low risk can lead to significant losses over time, as evidenced by a notable decline over five years [5] - The oversupply of industrial parks and office buildings necessitates careful scrutiny of the underlying assets of REITs [8] - The experience from international markets suggests that REITs often exhibit volatility comparable to stocks, contradicting the notion of them being low-risk investments [8]

Core Viewpoint - Armada Hoffler Properties (AHH) is currently trading significantly lower than its performance in the same quarter last year, with a trading multiple of 6.17 times the midpoint of its normalized funds from operations (NFFO) guidance of $1.05 per share [1] Group 1: Company Performance - AHH's current trading multiple is 6.17x the midpoint of its NFFO guidance range [1] - The company has seen a substantial decline in its stock price compared to the previous year [1] Group 2: Market Context - The equity market serves as a mechanism for wealth creation or destruction over the long term, influenced by daily price fluctuations [1] - Pacifica Yield focuses on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Core Insights - The real estate sector is currently underperforming compared to the broader market, making it difficult to identify thriving Real Estate Investment Trusts (REITs) [1] - Welltower (WELL) is highlighted as a successful REIT amidst the challenging market conditions [1] Company Analysis - Welltower is positioned as a strong investment opportunity within the REIT sector, particularly for those seeking dividend growth and long-term investment potential [1] - The company is part of a diversified investment strategy that includes classic dividend growth stocks, Business Development Companies, REITs, and Closed End Funds, which can enhance investment income while achieving total returns comparable to traditional index funds [1]

Core Viewpoint - The real estate sector is currently underperforming compared to the broader market, making it difficult to identify thriving Real Estate Investment Trusts (REITs) [1]. Group 1: Company Analysis - Welltower (WELL) is highlighted as a REIT that is managing to thrive despite the challenges faced by the real estate sector [1]. - The company is positioned as a potential investment opportunity for those seeking high-quality dividend stocks and long-term growth [1]. Group 2: Investment Strategy - A hybrid investment strategy combining classic dividend growth stocks, Business Development Companies, REITs, and Closed End Funds is suggested as an effective way to enhance investment income while achieving total returns comparable to traditional index funds [1]. - This approach aims to balance growth and income, allowing investors to capture total returns on par with the S&P 500 [1].

Group 1 - The analyst has over 10 years of experience researching more than 1000 companies across various sectors including commodities and technology [1] - The focus has shifted from writing a blog to creating a value investing-focused YouTube channel, where hundreds of companies have been researched [1] - The analyst expresses a particular interest in metals and mining stocks, while also being comfortable with other industries such as consumer discretionary, REITs, and utilities [1]

1. Market Performance - The CSI REITs Total Return Index closed at 1045.73 points this week (October 27 - 31, 2025), up 0.06% weekly, continuing last week's stabilization trend. The market fluctuated during the week, with a 0.44% drop on Monday, a cumulative 1.1% increase on Tuesday and Wednesday driven by the central bank's restart of treasury bond trading information, and a cumulative 0.59% retracement on Thursday and Friday after the concentrated disclosure of the third - quarter reports. From a monthly perspective, the total return index has declined for four consecutive months, and the market remains weak [1][9]. - This week, 49 REITs closed higher and 27 closed lower, and the trading activity of REITs increased. As of Friday, the total market value of 76 listed REITs in China reached 220.6 billion yuan, with a circulating market value of 110.4 billion yuan [2][9]. - In terms of major asset classes, although the overall performance of REITs was average this week, four types of REITs, including consumer facilities, rental housing, municipal environmental protection, and new - type facilities, showed obvious recovery and outperformed the Shanghai - Shenzhen 300, CSI 500, and CSI 1000. The Hang Seng Tech and SHFE Gold declined by more than 2.5% [12]. 2. Sector - by - Sector Analysis 2.1 Municipal Environmental Protection - The sector exceeded expectations, with better recovery in charging prices or processing volumes. As the heating season approaches, heating - related projects are worth attention. For example, the available distribution amount of the Fuguo Shouchuang Water Service REIT in the third quarter increased by 30.12% year - on - year, mainly due to better accounts receivable collection in the Shenzhen project than in the same period last year, an increase in sewage treatment volume by 1.23% year - on - year, and an increase in the average sewage treatment unit price by 7.05% year - on - year [16][20]. - The available distribution amount of the China Aviation Capital Shougang Green Energy REIT in the third quarter increased by 97.4% year - on - year, mainly due to the collection of garbage treatment fees by the Beijing Urban Management Commission, an increase in national subsidy payments compared with the same period last year, and an increase in the amount of domestic garbage treatment [21]. 2.2 Data Centers - The sector is strong under the AIDC intelligent computing power boom, and the computing power demand is expected to remain strong in the future. There are currently only 2 REITs in this sector. Although the projects have a single tenant and a long - term lease, the tenants are China's three major telecommunications operators, with high reliability. At current prices, the distribution rates of the two REITs are below 4%, and Runze Technology is slightly higher than Wan Guo [3][24]. 2.3 Consumer Facilities - The sector enters the performance sprint period at the end of the year. The performance in the third quarter was generally stable, and the annualized distribution rate in the third quarter ranged from 3.59% (Huaxia Huarun Commercial) to 5.53% (E Fund Huawai Market). It is recommended to focus on projects with high distribution rates, stable rental performance, and good consumption scenarios, such as E Fund Huawai Market, Huaan Bailian Consumption, Jashi Wumei Consumption, and Huaxia Shouchuang Outlets [26]. 2.4 Rental Housing - The sector's performance is stable, with a high occupancy rate. Multiple projects are in the process of expansion. The annualized distribution rate in the third quarter ranged from 2.69% (Red Clay Innovation Shenzhen Affordable Housing) to 4.02% (Huitianfu Shanghai Real Estate Rental Housing). After the bond market stabilizes, it can be the first choice for investment [32]. 2.5 Industrial Parks - The sector continued to face pressure in the third quarter, with the distribution rate ranging from 1.90% (Jianxin Zhongguancun) to 5.73% (Huaxia Hefei High - tech). The projects are significantly differentiated, and it is recommended to focus on park bonds with an occupancy rate starting with "9" [36]. 2.6 Warehousing and Logistics - The sector is still affected by the impact of new supply. Projects with a large proportion of related - party leases can resist certain demand competition. It is recommended to focus on Red Clay Innovation Yantian Port, Jashi JD Warehouse Infrastructure, and Southern SF Logistics, which have a relatively high proportion of related - party leases [47]. 2.7 Transportation Facilities - The sector is significantly affected by surrounding competing projects. The passenger and freight traffic of road assets in the eastern region has recovered better overall. It is recommended to focus on road assets in the eastern region [16][50]. 2.8 Energy - The sector's performance is generally under pressure due to factors such as wind, light, and water resources, as well as market - based trading and other pressures. Some projects have carried out factoring to ensure current dividends [16]. 3. Other Important News - This week, the REITs with relatively large increases were Cinda Principal Agricultural ( + 4.22%), Southern Wan Guo Data Center ( + 4.09%), and CICC Yinli Consumption ( + 3.85%); the REITs with relatively large decreases were Huaxia Hefei High - tech ( - 7.78%), China Merchants Science and Technology Innovation ( - 4.74%), and E Fund Guangzhou Development Industrial Park ( - 4.19%) [59]. - The trading activity of REITs increased this week, with the average daily trading volume of 618 million yuan, the average daily trading volume of 149 million shares, and the average daily turnover rate of 0.61%, with a month - on - month change of + 13.68%, + 18.74%, and + 0.09 percentage points respectively [63]. - There are 5 projects to be unlocked in November 2025, including CICC Liandong Science and Technology Innovation (2025/11/5, 39.09%), Yin Hua Shaoxing Raw Water and Water Conservancy (2025/11/8, 18.06%), Huatai Jiangsu Expressway Control (2025/11/15, 55%), China Merchants Expressway (2025/11/21, 55.78%), and CICC Anhui Expressway Control (2025/11/22, 37.29%). Attention should be paid to the potential trading pressure brought by the recent unlocking projects [2][65]. - As of October 31, 2025, there are about 4 - 5 potential REIT issuance projects remaining this year, including 1 project that has been issued but not yet listed, 1 project that is currently being issued, 7 projects that have received feedback from the exchange, 1 project that has been accepted by the exchange, and 1 project that has been declared to the exchange [70].

Company Overview - Federal Realty Investment Trust (FRT) is one of the oldest and most respected Real Estate Investment Trusts (REITs) in the US, founded in 1962, focusing on high-quality retail and mixed-use properties in major metropolitan markets [1]. Analyst Background - The analyst has over 10 years of experience researching companies across various sectors, including commodities and technology, and has researched over 1000 companies [1]. Investment Focus - The analyst has transitioned from writing a blog to a value investing-focused YouTube channel, covering hundreds of companies, with a particular interest in metals and mining stocks, as well as comfort in other industries like consumer discretionary/staples, REITs, and utilities [1].