TSX:DIR.UN - Post Discussion
Post by
retiredcf on May 17, 2023 8:47am
TD
Dream Industrial REIT
(DIR.UN-T) C$14.17
Resuming Coverage Following D.un's Sale of DIR Units Event
We are resuming coverage on DIR following the sale by Dream Office of 12.5mm DIR units at $14.20/unit. None of the $177.5mm of gross proceeds were received by DIR. Dream Office's ownership falls 5% (14.1mm DIR units) from 9.6% previously.
Impact: NEUTRAL
Following the completion of the equity offering, there will be no impact to DIR's capital structure, as none of the proceeds were received from the issue. DIR's public float increases to 259.5mm from 247mm previously. Recall that the ownership by Dream Office arose out of the 2012 IPO of DIR, which was a subsidiary of Dream Office (originally Dundee REIT).
Q1/23 Results. For a review of DIR's Q1 results which were announced earlier in May, see our note here.
TD Investment Conclusion
As the only larger-cap REIT with majority exposure to the strong Canadian industrial property market, we believe DIR's valuation will continue to see strong support. Additionally, the Q1/23 results of both DIR and its closest peer Granite demonstrate why we continue to favour industrial property-focused REITs with lower balance sheet leverage. We reiterate our BUY recommendation and $17.00 target price.
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