Nexus Industrial REIT T.NXR.UN

RE:An interesting Seeking Alpha article about DIR.un ...

[Defiance2050]

CanSiamCyp wrote:

.... particularly the part about issuing secondary offerings above NAV as per the following excerpt:

• "Dream continues to issue stock above NAV, which essentially is a non-dilutive way to fund expansion, as the stock issues actually increase the NAV."

https://seekingalpha.com/article/4471336-dream-industrial-stock-a-4-2-percent-yield-from-a-growing-warehouse-reit?mail_subject=dreuf-dream-industrial-reit-a-4-2-yield-from-a-growing-warehouse-reit&utm_campaign=rta-stock-article&utm_content=link-2&utm_medium=email&utm_source=seeking_alpha

Since BMO provides the following statistics in their NXR.un update, we can assume that the secondary offerings have the same characteristics as the DIR.un offerings (i.e., non-dilutive and incremental to NAV):

NAV $11.50 
Prem/(Disc) to NAV 9.9%





 

I agree with the point you are trying to convey about accreditive dilution. But in the short term is some pain.

NAVPU is a really iffy number especially in todays industrial market where the forward values continue to go up. However I think there is still the near time NAVPU that Nexus sold shares at a premium. The Dream properties are valued higher on the open market than the NAVPU even factoring in a ~10% asset manager discount. 

What this article fails to mention is Dream Industrials shift to acquiring in Europe and the near 0 interest European bonds it can issue. Mortgages are a good rate however with larger public Reits at the moment bonds are cheaper. 

Majority of the commercial real estate market is private and transactions are coming through at continually lower cap rates. 

With the assumption there are more properties that could be transacted with the London vendor and less competition than the big 6 there are still acquisition options.