BOCOM International released a research report stating that given the Hong Kong retail market may still require time for consolidation, the firm has slightly lowered its revenue and distribution forecasts for Fortune REIT (00778) for 2025 and 2026. However, the firm believes that improvements in the stock market and real estate performance may generate wealth effects and help stabilize the market in the medium to long term, forecasting that distributions in 2026 and 2027 could grow approximately 2% to 3% year-on-year.

The potential inclusion in the Stock Connect scheme will serve as a key catalyst over the next 12 months, with the impact of interest rate cuts expected to outweigh changes in rental adjustment expectations. Given the reduction in interest rates and discount rates, BOCOM International has marginally raised its target price to HK$5.92 while maintaining a "Buy" rating.

BOCOM International noted that Fortune REIT's Hong Kong retail portfolio, which focuses primarily on essential consumption, maintains resilience and is expected to sustain high occupancy rates. Recent HIBOR volatility has led to stock price declines, but the firm believes that potential Federal Reserve rate cuts in September or by year-end will help support the company's stock price recovery.