• The S-REITs Index declined 4% in August, reversing the 3% gain in July. NTT DC REIT (NTTDCR SP, non-rated) was the best performer, rising 3.8% (-6.4% YTD), following a positive 1Q26/27 business update, with DI 10.6% above its IPO projection. Daiwa House Logistics Trust (DHLT SP, non-rated) was the worst performer, declining 17.5% (-29.2% YTD), amid concerns over JPY weakness against SGD and vacancy risk. The overseas retail REIT sub-sector was the best-performing sub-sector, declining 0.8%, while overseas commercial REITs were the weakest, declining 6.2%.
• The Fed turned more hawkish, delivering a 25bps hike to 3.75–4.00%, with the Dot Plot indicating another hike in 2026. For S-REITs, higher-for-longer rates could weigh on valuations by putting upward pressure on dividend yields and keeping refinancing costs elevated, although the impact should be cushioned by fixed-rate debt and hedges. Importantly, with 3M-SORA already having fallen significantly to c. 1.2% (from 3.7% in 2023), the direct impact on borrowing costs may be more limited for S-REITs with SGD-denominated debt, well-laddered maturities, and high fixed-rate/hedged debt exposure (c.75% on average).
• We maintain our OVERWEIGHT recommendation on S-REITs, focusing on names that can deliver DPU growth despite elevated interest rates. We favour REITs with robust balance sheets, defensive earnings profiles, and a high proportion of fixed-rate debt, which should provide greater resilience against rising rates and interest rate volatility. Sector operating fundamentals remain stable, and we continue to favour retail S-REITs, supported by healthy tenant sales, near-full occupancy and limited new supply, which should underpin mid- to high-single-digit rental reversions in FY26e. Our top picks are high-yielding REITs with resilient portfolios: Stoneweg Europe Stapled Trust (SERT SP, BUY, TP: €1.89), Elite UK REIT (ELITE SP, BUY, TP: £0.41), and United Hampshire US REIT (UHU SP, BUY, TP: US$0.69).

Overview BLOKS is a leader in China’s assembly character toys market. The company holds over 500 patents, possesses original IP capabilities, and has non-exclusive licenses for approximately 50 well-known IPs. Its product positioning is “high quality at a reasonable price.” Leveraging its product strength and supply chain advantages, BLOKS maintains cost competitiveness while continuously expanding its product categories. The company has established a multi-channel sales network, and since 2022, has primarily focused on offline channels centered on distributors. According to...
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Overview POP MART is primarily engaged in the design and development of trendy toys. It operates a comprehensive platform covering the entire industry chain of intellectual property (IP) for trendy toys, with businesses including IP incubation and operation, trendy toys and retail, theme park and experiences, and digital entertainment. The company’s products include blind boxes, figurines, ball-jointed dolls (BJD), MEGA, plush toys, and derivatives, among others. Its self-developed products primarily feature artist-owned IPs such as THE MONSTERS, MOLLY, SKULLPANDA, and...
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