TSX:NXR.UN - Post by User
Post by
hawk35on Nov 14, 2023 11:55pm
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Post# 35736043
RBC Initial Comments
RBC Initial CommentsNovember 14, 2023
Nexus Industrial REIT Q3 in line; SP NOI growth pace slowed somewhat; Asset value marked up
TSX: NXR-U | CAD 6.98 | Sector Perform | Price Target CAD 10.50
Sentiment: Neutral
First Look: Nexus Industrial REIT (“NXR”) reported FFO per unit of $0.20, -5.3% y/y vs. RBC/Consensus of $0.20/$0.19. NOI growth pace of +2.5% is slightly lower than prior quarter but MTM opportunity remained consistent at +25%. NAV was interestingly marked up and variable rate exposure has been reduced to almost nil.
Key points:
• SP NOI growth: +2.5% (this compares with +4.3% in Q2). Estimated MTM on portfolio is 25% (with a 7 year WALT)
• Occupancy: 97% (unchanged q/q and y/y)
• Capital allocation activity: 1) Acquisitions: NXR closed on 142K SF industrial property in Burlington, Ontario for $48M ($342 PSF); Post Q3, it closed on 336K SF in London for $56M ($166 PSF), and expects to close on a new Calgary area industrial property in Q4; 2) Development: This also remains a priority for NXR with 3 projects underway totalling 523K SF, $95MM at 7.2% yield and 1.1M SF under planning stages.
• Reported NAV: $12.89 (+3.2% q/q, +3.5% y/y); Cap rate 5.98% (flat). NXR noted external appraisals were done on $489M this quarter, resulting in value mark up.
• Leverage: Debt/GBV 48.5%, +50bps q/q. Post Q3, the REIT entered into fixed rate swap agreements for $150M which will result in NXR having largely no variable rate debt exposure.