The Zhitong Finance App learned that Citi released a research report stating that it maintained the “buy” rating of Zhifu Real Estate Trust (00778) and lowered the target price by 5.5% from HK$6.05 to HK$5.72. Citi predicts that until October 2025, there will be no debt refinancing requirements, and 62% of interest costs have already been hedged. It is expected that with HIBOR already peaking, interest expenses will remain stable in the future.

The bank expects that the decline in Hong Kong's HIBOR (HIBOR) and the overall increase in rents will keep Zhifu Industries' dividend per share (DPU) stable in 2024. The dividend rate is expected to be around 9%. The bank also believes that Zhifu Real Estate's investment portfolio is resilient, and is benefiting from the steady recovery of the local retail industry and the expected reduction in US federal funds interest rates in the second half of this year.

According to the report, the rental rate of Zhifu Industrial increased slightly to 94.4% at the end of last year, and the tenant renewal rate was 83%. The leasing performance of the catering, service, fashion, and footwear businesses was good, but the leasing situation of kindergartens and real estate agents declined, with the contribution of real estate agents falling to 8% from 12% a year ago. With 36% of leases expiring in 2024 and a significant decline in the share of property agents, rental income is expected to increase slightly by 0.6% this year.