Raymond James Upgrade With new supply not keeping up with robust leasing demand and available space almost non-existent across Canada, Raymond James analyst Brad Sturges sees “the perfect storm for accelerating global industrial real estate valuations.”
In a research report released Tuesday, he raised his price targets and net asset valuation estimates for TSX-listed real estate investment trusts, pointing to a “growing imbalance of demand and supply, a pull forward in leasing demand from ecommerce sales growth and supply chain disruptions, rising development land and construction costs, and accelerating cap rate compression due to an increasingly large pool of institutional capital seeking to invest in the industrial asset class”
“Despite this macro backdrop, we view Canadian-listed industrial REITs as still very attractively priced, featuring strengthening balance sheets, and solid forecasted AFFO compounded annual growth rates (CAGRs), while still trading at wide P/AFFO multiple discounts on average versus the U.S. industrial REIT average,” he added.
Mr. Sturges made these changes to “reflect higher private market pricing inherent in recent and pending global industrial real estate transactions:”
- Dream Industrial REIT to $17 from $15.75. The average on the Street is $15.89.