GREY:DUNDF - Post by User
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retiredcfon May 09, 2019 8:40am
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Post# 29727938
TD
TDThis is a flash report so there's potential for them to raise their $16.50 target. GLTA
Dream Global REIT
(DRG.UN-T) C$14.04
Q1/19 First Look: SPNOI Growth +4.9%; EPRA NAV Rises 6% Q/Q Event
DRG reported solid Q1/19 results with FFO meeting our forecast and EPRA NAV/ unit rising 6% from Q4/18 to €10.91 ($16.36). Conference call is today at 8:00 a.m. (1-888-465-5079 or 416-216-4169 with passcode 7467649#).
Impact: SLIGHTLY POSITIVE
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DRG's portfolio fair value increased by €123mm in Q1/19, driven by continued cap rate compression, market rent increases, leasing and value-add initiatives, and the previously-announced sale of the development site in Offenbach (greater Frankfurt). The average cap rate for Core/Core+ properties fell 40bps q/q to 4.7%. DRG's new EPRA NAV/unit is 5% above our last-published NAV/unit estimate of $15.40.
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Based on last night's close, DRG trades 9% below our NAV and 14% below EPRA NAV.
Other Q1/19 Highlights:
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FFO/unit was stable y/y at $0.26, meeting consensus and our estimate (see Exhibit). DRG delivered stable FFO/unit despite the strengthened Canadian dollar, reducing leverage by 670bps y/y and recycling capital into higher quality, lower-yielding properties. Leverage declined 150bps q/q to 41.5% (in-line with management's "low-40% range" target), while DRG had $128.5mm of assets under contract for disposition. The Offenbach property's sale price of €35.5mm is triple its book value at Q4/18.
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SPNOI growth was +4.9%, while in-place occupancy increased 60bps q/q to 91.4% and committed occupancy increased 20bps q/q to 91.7%.
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On April 30, 2019, DRG acquired "OH5", a 25,400 square meter (274,000sf) multi-tenant light industrial property in Kassel, Germany (a strong light industrial/ logistics hub). The €18.3mm acquisition was at a 7.0% cap rate, and offers expansion potential of up to 29,000 square meters of additional density. The property is 95%-occupied by tenants with strong covenants, and a WALT of over 7 years.