Amica Mature Lifestyles Inc ACCKF

REIT Note - ACC

[CalgaryLad]

 

Canaccord Wealth Management  - Wednesday February 13, 2013

REITs...is there any other asset class? For the fourth consecutive year, Canadian REITs (as defined by the S&P/TSX Capped REIT Index) delivered positive total returns in 2012. Following a 21.7% total return in 2011, Canadian REITs returned 17.0% in 2012. Year-to-date 2013, Canadian REITs have returned 0.8%, and in Canaccord Genuity's view, are well-positioned to once again deliver double-digit total returns. While there are many variables that can impact a REITs total return, Canaccord Genuity's Real Estate team believes that it can be useful to look at which REITs outperformed and their common characteristics. In their analysis, they looked at several different variables that could have driven sector-leading performance in 2012: 1) Valuation at the beginning of the year both in terms of cash flow multiples and premium/discount to NAV; and 2) Which REITs posted the strongest same-property NOI or AFFO per unit growth during the year. Based on this analysis, it became clear to them that among the REITs/REOCs under coverage that disclose same-property NOI growth, those that produced the strongest same-property NOI growth also generated sector-leading total returns in 2012. Further they found that those REITs that produced the strongest total returns in 2012 also posted the most significant growth in AFFO per unit in the first nine months of the year. However, much of the growth in AFFO was due to internal growth and not accretive acquisitions. Importantly, the team believes that those REITs which are best positioned to produce strong internal growth should outperform in 2013. Looking forward to the year ahead, the team highlights a handful of REITs/REOCs which they believe should produce strong same-property NOI growth and substantial gains in per unit/share AFFO: Amica Mature Lifestyles, Crombie REIT, InterRent REIT and Mainstreet Equity Corp.