TSX:IIP.UN - Post by User
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retiredcfon Jun 25, 2024 10:09am
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Post# 36104852
Scotiabank
Scotiabank Scotiabank analyst Mario Saric sees a short-term buying opportunity in Canadian apartment REITs,
“CAD Apartment REITs have lagged U.S. peers by an avg. 18% year-to-date, giving back all of the avg. 15% beat in 2023 (9% ex. BEI); we look across our CAD and U.S. coverage at various macro (population growth, new supply, etc.) and micro factors (FFOPS [funds from operations per unit] growth, lease spreads, in-place vs. market rent, debt) overlapped with relative valuation and highlight the best opportunities we see in the Canadian Apartment sector. We view the recent pullback in CAD Apartment REITs (-9% since March 20th) and new-found AFFO [adjusted funds from operations] discount to U.S. peers as a near-term buying opportunity (demand > supply this year), but see ourselves more balanced in 2025 (decelerating FFOPU growth; Accelerated CAD FFOPU growth (for some) and recovering private deal volumes = near-term catalysts. Our top CAD picks in order = InterRent (IIP) and CAP REIT (CAR) and we are more positive on BEI on this report”