Pure Industrial Real Estate Trust T.AAR.UN

CG adds AAR.UN to Focus List

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Valuation and recommendation. We utilize a 6.30% cap rate to value Pure Industrial’s portfolio, resulting in a NAV per unit of $5.20. Pure Industrial is currently trading at an implied cap rate of 6.8%, or a 15% discount to NAV. We expect management to focus on closing this gap through divesting non-core assets, focusing on internal growth, and repurchasing units. Our target price of C$5.25 is in line with our NAV estimate, given the REIT’s high quality and well-located portfolio. Combined with an annual distribution of $0.31 per unit, our target price implies a 12-month forecast total return of 25%, and we continue to rate Pure Industrial REIT a BUY.

We are adding Pure Industrial Real Estate Trust to the Canaccord Genuity Focus List.