More Scotiabank Scotiabank analyst Mario Saric reviewed the quarter for the REIT sector and listed his top picks in the sector,
“CAD REITs reported avg. Q1 year-over-year FFOPU [funds from operations per unit] and SSNOI [same store net operating income] growth of 0.5 per cent and 6 per cent, with FFOPU 0.6-0.7 per cent below both Scotia and consensus, driving avg. 2023 consensus AFFOPU [adjusted funds from operations] down 1.1 per cent, mostly in Office, Diversified, and Seniors … CAD REITs are now lagging the TSX by 2 per cent year-to-date (were up 2 per cent post Q4 results). We still think soft landing = stable NOI growth = reasonable debt availability = less pronounced cap rate expansion = buy REITs today vs. harder-landing = 10-per-cent-plus total return downside (i.e., 50bp+ higher cap rate). Our Top Growth Picks = CAR, DIR, GRT, IIP, SVI. Our Top Value Picks = AP, BN, CSH, HOM, MHC, REI, TCN. Our Top Income Picks = CHP, CRR, CRT.”