Citigroup: Raises fund industry trust target price to 5.56 Hong Kong dollars, believing that its worst times are over.

Citibank published a research report stating that the worst time for Prosperity REIT has passed, and they have raised their forecast for the trust. The latest estimate is that the distribution per unit will increase by 1% annually in 2025 and 2026. This is based on retail sales and customer traffic stabilizing since the second quarter, with cyclical factors potentially leading to moderate growth in the second half of the year. The group's floating rate debt ratio is 50%, and if HIBOR remains around 1%, financing costs are expected to further decrease to around 3% by the end of 2025. Furthermore, the occupancy rate remains resilient at 95%, and lease renewal rates are at 82%. There may be room for upside through adjustments to the tenant mix and asset enhancement projects. The bank maintains a "buy" rating on the trust, with a target price raised from HK$4.6 to HK$5.56.