Report Summary

• The Federal Reserve paused rate cuts in January 2026, maintaining the 3.50-3.75% range, with further easing expected later in the year. This stable rate outlook is supporting improved appetite for acquisitions and investment inflows into Asian REITs.
• Regional REITs delivered mixed performance at the start of 2026: China REITs outperformed (+4.2% m/m) on fund inflows, while Singapore, Hong Kong, and Thai REITs saw muted gains or slight declines. Subsector standouts included Singapore data centre REITs and large-cap Hong Kong commercial REITs.
• Sector preferences for 2026 are: office/industrial for Singapore REITs, retail for Hong Kong and China REITs, and industrial/hotels for Thai REITs. Key catalysts include DPU growth, more asset injections, and supportive fund flows, especially from ESG-focused funds in Thailand.
• Risks include tightening liquidity from upcoming REIT IPOs in China, potential regulatory changes in Thailand (though impact expected to be limited), and short-term valuation pressures from rising bond yields.
• Top picks highlighted include INETREIT, LHHOTEL, and WHAIR in Thailand for their strong income prospects, growth from tourism recovery, and ESG credentials. Singapore’s mid-cap REITs are also favoured for yield compression and growth potential.