TSX:CAR.UN - Post by User
Comment by
Mephistopheles3on Aug 11, 2022 12:10pm
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Post# 34888581
RE:RE:RE:Q2 2022 Results Summary
RE:RE:RE:Q2 2022 Results Summary Hey mate,
I hold equal weight positions in ERE and CAR - looking at potentially increasing exposure to ERE as well as their results were really solid and stock is still selling depressed. This is likey because of political concerns - the Dutch government annoucned they might look at putting mid-market rentals on rent control. The Dutch system is really quite interesting - they use points to determine which units are "liberalized" or which are not. However, this is a small risk for me and doesn't justify the 30% decrease in stock price recently when it only would potentially impact a small portion of their units.
ERE pays CAR a management fee which is based on % of revenue I believe. ERE does not actually have any employees or do anything - it's CAR that manages the buildings for them. For me, that's actually a good thing as they benefit from CAR's financials as well as management experience.
The one nice thing about ERE is that in the Netherlands, there is almost zero risk of inflation. 100% of tenants pay for their utilities as opposed to CAR who got hammered on natural gas prices. The renters over there even mow their own lawns and such! So there's little to no risk to the margins of ERE which is how they're able to increase their FFO/unit in double digits and will do so for some time.