TSX:NXR.UN - Post Discussion
Post by
retiredcf on Apr 06, 2023 9:03am
Scotiabank
Scotiabank analyst Himanshu Gupta likes the outlook for industrial REITs despite strong returns year to date,
“National industrial rents grew 28 per cent year-over-year (TOR +31% y/y and MTL 44% y/y) … New supply picture still well-contained (2.4% of total inventory). H2/23 will see a fair bit of deliveries but new construction starts expected to slow down … YTD recovery, valuation looks attractive on absolute and reasonable on relative basis. Superior AFFOPU [adjusted funds from operations per unit] growth profile is the key source of our overweight position … Set-up is there for industrial reits given higher growth, lower leverage, reasonable valuation … We Believe Canadian Industrial REITs Are Set Up for a Year of Outperformance in 2023; We Anticipate Strong AFFO Growth, Low Leverage, and the Potential for AFFO Multiple Expansion (Relative to the Canadian REIT Sector and U.S. Industrial REITs)”
Mr. Gupta’s top picks in the sector are Granite REIT (“superior growth, low leverage and reasonable valuation”), Dream Industrial REIT (“dominant position in Canadian industrial markets”) and Nexus Industrial REIT (“Opportunity to trade like a pure-play Canadian industrial name”).
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