Canaccord Expecting growth from its portfolio to “accelerate” over the next few quarters as apartment fundamentals improve in Alberta, Canaccord Genuity analyst Christopher Koutsikaloudis raised the firm’s recommendation for Boardwalk Real Estate Investment Trust to “buy” from “hold” upon assuming coverage.
Following a recent decline in unit price, he thinks it is now “attractively valued,” pointing to the “outlook for accelerating cash flow growth over the next few years.”
“In our view, Boardwalk should benefit over the next several years from strengthening multifamily fundamentals in Alberta and the ability to quickly capture increases in market rental rates as the majority (73 per cent) of its portfolio is not subject to rent control,” he said. “On an annual basis, incentives on leases currently in place within Boardwalk’s portfolio amount to $35 million (13.5 per cent of Q1/22 annualized NOI). However, as vacancy rates in Calgary have tightened, landlords now have a higher degree of pricing power, and the use of incentives is declining rapidly.”
He trimmed Canaccord’s target for Boardwalk shares to $51 from $56. The average is $57.73.