Arena REIT (ASX:ARF) is currently trading at a discount to net tangible assets and is offering a dividend yield of about 5.5% with further upside expected, said Jefferies in a Wednesday note.

The company on Wednesday reported operating earnings of AU$0.097 per security for the fiscal first half ended Dec. 31, 2025, up from AU$0.092 a year earlier.

Asset revaluation gains led to a 5% increase in net tangible assets during the half year, which reduced gearing to 23.2%, which, according to Jefferies, is likely the lowest level in the real estate investment trust sector.

Jefferis maintained a buy rating on ARF and decreased its price target to AU$3.86 from AU$3.90.