East Group Properties (NYSE:EGP) is an industrial REIT focused on sub-150K square foot warehouses in the Sunbelt. The Buy Thesis EGP has the best-positioned industrial assets in terms of both location and property specs. It's relatively limited competing supply sets EGP up for roughly 10% AFFO per share growth annually. The growth is not reflected in its 21.8X AFFO multiple, which makes it among the cheapest industrial REITs on a leverage-neutral basis. As this is my first focus article on EGP, it will be f ...

Investment Rating - The report upgrades Vietnam to Overweight (OW) within ASEAN, alongside Singapore and the Philippines, while maintaining Neutral on Indonesia and Malaysia, and Underweight on Thailand [1][18]. Core Insights - Vietnam's recent tariff deal with the US, setting a 20% rate on domestically-produced goods, is viewed as a significant positive development, potentially boosting foreign direct investment (FDI) and supporting economic growth [3][19]. - The report anticipates that announcements of trade deals and lower tariffs will serve as key catalysts for market movements in the near term, particularly for countries actively negotiating with the US [4][19]. - Despite the positive outlook, the report cautions that it is still early for earnings forecasts to rebound, with potential risks of downward revisions remaining [4][19]. Summary by Sections Tariff Negotiations - Vietnam has successfully negotiated a reduction in tariffs from 46% to 20%, with a 40% tariff on transshipment goods, which may impact exports with significant Chinese content [5][19]. - Other ASEAN countries, including Thailand, Malaysia, Indonesia, and the Philippines, are still in discussions with the US regarding tariff negotiations [1][5]. Economic Growth and FDI - Vietnam's GDP growth is projected to approach 8% in 2Q25, driven by public spending and investment disbursement, distinguishing it from other ASEAN nations with limited fiscal room [18][20]. - The report highlights that Vietnam's manufacturing and export sectors are expected to remain resilient, supported by a favorable tariff environment compared to China [19][20]. Sector Focus - Key sectors to watch include industrial real estate, ports, logistics, construction, and technology producers, which are expected to benefit from the lifting of uncertainties surrounding trade policies [4][15]. - The report recommends a focus on domestic growth proxies, particularly in Vietnam's banking, industrial, and consumer discretionary sectors [18][19].

Summary of EastGroup Properties (EGP) 2025 Conference Call Company Overview - EastGroup Properties is identified as an industrial Real Estate Investment Trust (REIT) focusing on last mile delivery logistics, primarily in Sunbelt markets such as California, Texas, Florida, and the Carolinas [4][5][6] - The average building size is 95,000 square feet, with an average tenant size of 35,000 square feet [4][5] Core Business Strategy - The company targets last mile delivery, which is increasingly important as urban areas grow and industrial land becomes scarce [5][6] - EastGroup operates as a developer and is indifferent to whether it buys, builds, or acquires vacant properties based on market conditions [7][8] - The company has experienced record leasing activity, with a 97% occupancy rate, indicating strong demand despite macroeconomic uncertainties [10][12][16] Market Dynamics - The macro environment has shown fluctuations, with a recent slowdown in tenant activity, particularly for larger spaces [14][15] - Supply of industrial properties is at a record low, with construction in markets like Atlanta at its lowest since 2014 [18] - The company has a competitive advantage due to its existing land holdings that are zoned and permitted, allowing for quicker development compared to peers [20] Financial Performance - EastGroup has maintained a strong balance sheet, with a debt to EBITDA ratio trending below three and a fixed charge coverage ratio above 15 [42][43] - The company has seen organic growth in rents, with net effective rent increases of over 50% in the last two years [37][62] - The average Funds From Operations (FFO) multiple is currently below 19, compared to a five-year average of around 25, suggesting potential undervaluation [66][67] Regional Insights - The company has a diversified portfolio, with approximately 5% of its Net Operating Income (NOI) coming from Los Angeles, which has faced challenges with negative absorption rates [49][50][57] - Despite challenges in certain markets, EastGroup remains optimistic about long-term demand, particularly in areas with strong population growth [56][66] Future Outlook - The management expresses confidence in the company's positioning and anticipates a potential inflection point in the market as business confidence returns [66][67] - The company plans to remain patient and strategic in its development and acquisition activities, leveraging its strong balance sheet to capitalize on future opportunities [46][66] Key Takeaways - EastGroup Properties is well-positioned in the industrial REIT sector, focusing on last mile delivery in high-growth markets - The company has a strong financial foundation and is poised to take advantage of market opportunities as they arise - Management remains optimistic about future growth, despite current macroeconomic uncertainties and regional challenges

Group 1 - Rexford Industrial Realty, Inc. (NYSE: REXR) is identified as one of the few industrial REITs in the portfolio of the analyst [1] - The decision to include REXR in the portfolio was made in February of the current year [1] Group 2 - Roberts Berzins has over a decade of experience in financial management, focusing on shaping financial strategies for top-tier corporates [1] - Berzins has contributed to institutionalizing the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [1] - His work includes developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [1]