Core Viewpoint - Fermi, a Texas-based REIT focused on AI-related power and data center infrastructure, has increased its IPO fundraising target to $650 million by offering 32.5 million shares at a price range of $18 to $22 per share, raising its expected market valuation to $13.2 billion [1] Company Summary - Fermi plans to develop a 15 million square feet power plant and data center on the Texas Tech University campus, named "Project Matador," and has signed a long-term lease for the site [1] - The project is currently in the planning stage, with a goal to complete 1 million square feet of data center capacity and deploy 1 GW of power by the end of 2026 [1] - By 2038, Fermi aims to expand its power capacity to nearly 11 GW, utilizing energy sources including solar, natural gas, and nuclear [1] - The company has not yet generated any revenue [1]

Core Viewpoint - Despite a gradual recovery in real estate securities following earlier price adjustments, risks from U.S. trade policies and uncertainties surrounding Federal Reserve interest rate cuts continue to exert pressure on future growth [1] Growth Drivers - Resilient income levels: Real Estate Investment Trusts (REITs) tend to perform relatively stable in trade dispute or tariff-dominated market environments due to their focus on local demand and defensive characteristics, along with long-term leases that naturally hedge against inflation [3] - Solid fundamentals: Limited new project supply leads to supply-demand imbalances, supporting property valuations and rental levels [4] - Structural growth trends: Shortages in the residential market drive up rents for tiered units and senior housing, while digitalization trends such as e-commerce and artificial intelligence boost demand for logistics facilities (e.g., industrial properties, cold chain storage) and data centers [4] - Strong potential for valuation recovery: Historical data shows that when U.S. 10-year Treasury yields are between 3% and 5.25%, REITs often outperform the overall stock market, indicating potential for valuation recovery as interest rate expectations remain high [4] - Increased merger and acquisition activity potential: Attractive valuations combined with improving fundamentals encourage more private equity funds to participate in the REIT market, with a low-interest environment still favoring M&A transactions even if the Federal Reserve delays rate cuts [4] Investment Opportunities - The Asia-Pacific real estate sector exhibits relatively high defensiveness amid market volatility caused by trade policies and concerns over global economic growth, contrasting with the negative impacts on export-oriented industries [6] - In Japan, market concerns and political uncertainties threaten economic growth, suggesting that the Bank of Japan is unlikely to raise interest rates this year [6] - In Australia, if inflation is controlled, the Reserve Bank of Australia is expected to continue lowering policy rates through the remainder of 2025 [6] - Japanese developers benefit from improved shareholder return policies, while Japanese REITs are expected to perform well driven by catalysts in logistics and hospitality sectors [7] - In Australia, residential and retail REITs benefit from strong local consumption and rate cuts [7] - In Singapore, local retail and industrial REITs may have upside potential due to robust dividend growth and low vacancy rates [7] - In Hong Kong, non-essential retail REITs may benefit from low yields and potential interconnectivity arrangements with the mainland Chinese market [7] - Following two years of volatility, a stabilizing macro environment and declining capital costs provide clearer prospects for REITs, with certain sectors and regions showing solid fundamentals and clear long-term growth drivers, presenting attractive entry points for patient long-term investors [7] - Compared to the overall stock market, REITs exhibit lower earnings uncertainty, and a mild interest rate environment amid slowing economic growth favors valuation recovery, suggesting that global REITs may present optimal investment opportunities in a high-growth, low-inflation environment [7]

Core Viewpoint - The current bullish market sentiment in Hong Kong and A-shares presents both opportunities and challenges for investors, leading to a preference for investments that offer both safety and growth potential, such as Real Estate Investment Trusts (REITs) [1] Group 1: High Dividend as a Safety Net - One of the core advantages of commercial REITs is their stable cash flow and high dividend policy, which are less affected by economic cycles [2] - For example, China Merchants Commercial REIT reported total revenue of 225 million RMB in the first half of 2025, with rental income of 196 million RMB and distributable income of 57.46 million RMB, achieving an annualized distribution rate of 9.1% [2] - The company has maintained a 100% distribution rate since its listing, reflecting strong financial management and cash flow capabilities [2] Group 2: Potential for Asset Value Recovery - The current market environment has led to an undervaluation of commercial real estate assets due to excessive market reactions to short-term rental rate fluctuations [3] - Despite a decline in asset valuations, the core asset values remain intact, particularly for properties located in prime areas with stable foot traffic [3] - The decline in valuations is slowing, and as external market conditions improve, rental returns and asset values are expected to recover [3] Group 3: Growth Potential Driven by Policy and Low Leverage - The real estate sector is receiving positive signals from government policies aimed at stabilizing the market, which presents new opportunities for commercial real estate [4] - China Merchants Commercial REIT, with its quality assets and operational capabilities, is positioned to benefit from these favorable conditions [5] - The company has a low debt ratio of 41.2%, which reduces financial risk and provides flexibility for future expansions, enabling it to acquire quality assets during market downturns [5] Group 4: Market Outlook and Future Opportunities - Institutional investors are optimistic about REITs, especially with the potential inclusion of REITs in the Stock Connect program, which could attract long-term capital [6] - If successful, this inclusion may lead to a revaluation of the entire Hong Kong REIT market, benefiting companies like China Merchants Commercial REIT that possess quality assets and strong operational capabilities [6]

Group 1: Inflation Trends - The June Consumer Price Index (CPI) in the U.S. rose by 2.7% year-on-year, slightly exceeding expectations of 2.6%, and up from the previous value of 2.4% [1][2] - The core CPI increased by 2.9% year-on-year, meeting expectations but higher than the previous value of 2.8% [1][2] - The overall CPI data indicates a subtle resurgence of inflationary pressures, prompting a reassessment of market expectations regarding inflation [2] Group 2: Housing Market - The housing index increased by 0.2% in June, contributing significantly to the overall index rise [3] - Housing is viewed as a necessity with stable demand, showcasing strong anti-inflation properties [3] - Real estate investments, particularly Real Estate Investment Trusts (REITs), are expected to provide considerable returns due to stable rental income and property appreciation potential [3] Group 3: Energy Sector - The energy index rose by 0.9% in June, with gasoline prices increasing by 1.0% [4] - Over the past year, the energy index has decreased by 0.8%, with gasoline prices down by 8.3% [4] - Long-term opportunities are anticipated in the clean energy sector, driven by increasing global demand for renewable energy sources [4] Group 4: Food Industry - The food index rose by 0.3% in June, with household and away-from-home food prices increasing by 0.3% and 0.4%, respectively [5] - The food sector is characterized by rigid demand, less affected by economic cycles, and is experiencing a shift towards higher quality and safety standards [5] - Companies with brand advantages and those focusing on organic and health food production are expected to thrive in the competitive landscape [5] Group 5: Non-Food and Non-Energy Sectors - The index excluding food and energy rose by 0.2% in June, with a year-on-year increase of 2.9% [6] - Sectors such as home furnishings, healthcare, and entertainment are showing upward trends, while used and new vehicle prices are declining [6] - The healthcare sector remains attractive due to stable demand, especially for innovative pharmaceutical companies and high-end medical service providers [6]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The REITs market is expected to continue to perform well due to the downward pressure on bond market interest rates, enhancing the attractiveness of REITs as high-dividend, medium-low risk assets. The anticipated increase in social security and pension fund investments is expected to further improve the cost-effectiveness of allocations in this sector [3][5]. Market Overview - As of the 24th week of 2025, the CSI REITs (closing) index was 893.99, up 12.93% year-on-year and 0.87% month-on-month. The CSI REITs total return index was 1124.63, up 20.46% year-on-year and 0.88% month-on-month. Year-to-date, the REITs index has increased by 18.18%, outperforming the CSI 300 index, which has risen by 12.11%, resulting in an excess return of +6.07% [3][5][15][19]. Trading Volume and Performance - The trading volume of the REITs market reached 590 million shares, a year-on-year increase of 27.43%, with a transaction value of 2.844 billion yuan, up 42.06% year-on-year. The turnover rate for the period was 3.01%, down 11.73% year-on-year [3][26][32]. - In the 25th week, the weekly performance of various REITs sectors was as follows: affordable housing REITs rose by 5.32%, environmental REITs by 1.32%, while highway REITs fell by 0.60% [40][58]. Sector Performance - The one-month performance for the sectors was: affordable housing +8.21%, environmental +2.36%, highway +2.08%, industrial park +1.16%, warehousing and logistics +2.41%, energy +4.44%, and consumer +4.05% [40][58]. Upcoming Developments - The first batch of data center REITs has been registered, and public bidding for two 5A scenic area REITs has commenced. The Southern Runze Technology Data Center REIT has received approval from the China Securities Regulatory Commission, marking it as the first data center REIT on the Shenzhen Stock Exchange [4][12][13].

Group 1 - Citigroup reports that Link REIT (00823) will create a dual-engine through fund management and listed REITs under its 3.0 strategy [1] - The bank believes that Link REIT may cultivate a developed market trust fund in asset management in the short term, but pure asset separation is unlikely to occur soon [1] - Citigroup maintains a "Buy" rating on Link REIT with a target price of HKD 47.25, citing a yield of 6.5% which is 200 basis points higher than the 10-year US Treasury yield [1] Group 2 - Link REIT's stock price has increased by 25% since April, with a yield of 6.4% that is in line with the 10-year average, but lower than the 3-year and 5-year averages of 250 basis points [2] - Citigroup expects a decline in Distribution Per Unit (DPU) by approximately 2.5% due to a 3% to 5% negative rental adjustment, making total returns appear reasonable [2] - The company is expected to outperform the overall market through leasing and cost optimization in response to macroeconomic headwinds [2]

Group 1 - The S-REITs sector in Singapore experienced a decline of 6.2% due to the imposition of tariffs in early April, with a year-to-date total return of only 0.4%, underperforming the Straits Times Index and MSCI Singapore Index by 4.3% and 11.0% respectively [1] - The overall distribution per unit (DPU) for the S-REITs sector decreased by 2.8% year-on-year, with 7 out of 10 funds meeting market expectations, 1 exceeding expectations, and 2 falling short [1] - Notable declines in DPU exceeding 10% were observed in Mapletree Pan Asia Commercial Trust, SingPost Logistics Trust, and Mapletree Logistics Trust, attributed to high borrowing costs, unfavorable exchange rates, and reduced income from asset disposals [1] Group 2 - Institutional investors have seen a net outflow of approximately 495 million SGD from the S-REITs sector this year, particularly during the tense trade situation in early April, leading them to favor more defensive sectors such as telecommunications and non-cyclical consumer goods [1] - Singapore's OCBC Investment Research recommends investors to selectively choose high-quality stocks, particularly those with potential for distribution growth and strong asset portfolios, highlighting specific S-REITs such as CLAR, CICT, KDCREIT, and PLIFE [2] - By early 2025, the S-REITs market in Singapore is projected to rank second in Asia, with a total market capitalization of approximately 82 billion SGD, accounting for about 10% of the total market capitalization of the Singapore Exchange [2]

Group 1 - Citi expects Link REIT (00823.HK) to perform strongly in May, driven by recent stock price increases [1] - Link REIT is anticipated to be the biggest beneficiary of the upcoming stock-linked plan for real estate investment trusts [1] - The retail sector is expected to benefit from the Golden Week holiday, alongside a narrowing decline in Hong Kong's retail sales in March [1] Group 2 - Market expectations suggest that the US Federal Reserve may lower interest rates in June or later [1] - Link REIT is set to announce its fiscal year 2025 results at the end of this month, with an expected annual growth of 2% in distribution per unit [1] - The projected dividend yield for fiscal year 2026 is 7%, making it an attractive investment option [1] Group 3 - Citi maintains a "buy" rating for Link REIT, with a target price of HKD 47.82, positioning it as a preferred stock in the Hong Kong real estate investment trust sector [1]