 FTSE S-REIT Index inched up 2.9ppts in June, narrowing its gap with the STI and FTSE ST Real Estate Holding and Development Index. All sub-sectors in the green, led by Hospitality (+3.5%).

 Dividend yield spread of 249bps is -1.4SD of 10-year average. Deal momentum persisted. Near-term interest rates still below 5- and 10-year historical levels, supportive of acquisitions.

 Remain OVERWEIGHT with selective sector preferences. Catalysts expected from pick-up in economy. SREITs expected to resume DPU growth, potentially delivering FY21e DPU yields of 3.9-8.6%. Prefer Retail and Industrial. Top picks are Manulife US REIT (MUST SP, BUY, TP US$0.84) and Ascendas REIT (AREIT SP, BUY, TP S$3.65).