Summit Industrial Income REIT Unit T.SMU.UN

Primary Symbol: SMMCF

Summit Industrial Income REIT is a Canada-based mutual fund trust. The Trust is involved in the commercial leasing of real estate property with property locations in Ontario, Western Canada, Quebec and Atlantic Canada. The company is focused on the light industrial sector of the Canadian real estate industry.

OTCPK:SMMCF - Post by User

Summit Industrial Income REIT Unit

<< Previous

Bullboard Posts

Next >>

Post by retiredcfon May 11, 2022 8:27am

99 Views

Post# 34673291

TD

Have a $25.00 target. GLTA

Summit Industrial Income REIT

(SMU.UN-T) C$18.44

Q1/22 FFO/unit In-Line and +9% Y/Y; Distributions Raised 3%

Event

Q1/22 Results. Conference call is 9:00 a.m. (888-330-2446, passcode: 7589769#).

Impact: NEUTRAL

Results vs. Forecast (see Exhibit): Q1/22 diluted FFO/unit of $0.183 (+9% y/y, +3% q/q) was largely in-line with our $0.180 estimate and just shy of $0.19 consensus. AFFO/unit (our calculation) of $0.157 was largely in-line with our $0.154 forecast and was +10% y/y and +3% q/q.

Operations:

Portfolio occupancy of 98.2% was -100bps q/q, flat y/y, and has been lower only one other quarter going back to 2017. With occupancy holding in above 99% for the past two quarters, we were not surprised to see a decline materialize. We expect that the new vacancy represents opportunities to accelerate the capture of higher market rents. Lease commitments taking effect in future quarters represent half of current vacancy. The occupancy decline was experienced in Ontario (-160bps q/q to 98.3%) and Alberta (-90bps q/q to 96.5%), while Quebec remained flat at 100%.
Q1/22 new/renewal/blended leasing spreads were 54%/34%/42%. Renewal spreads were +93% in Ontario, +20% in Quebec, and +7% in Alberta. New lease spreads were the widest in Quebec at +110%. Tenant retention was 64% (74% q/q).
While SPNOI growth was reported at +1.8%, the more meaningful figure is +3.5% (after adjusting for y/y changes in bad debt expense), led by Ontario at +6.7%. The comparable adjusted SPNOI growth figure in FY2021 was approximately +3% and both FY2020 and FY2019 were 5%-plus.

Balance Sheet/Capital Allocation:

Summit announced a +3.0% increase in cash distributions (slightly ahead of our 2% expectation) to $0.0484/unit monthly ($0.581/unit annualized), effective for the May 2022 distribution.
IFRS fair value gains totaled $210mm in Q1 (+4.7% to Q4/21 portfolio value), with the overall cap rate -4bps q/q to 3.80% and average value/sf up 5% q/q (partly reflecting acquisitions) to $217/sf.
Debt/GBV was steady q/q at 28.1%, reflecting acquisition activity offset by fair value gains and equity issuance. A total of 12.4mm trust units were issued during Q1/22, including the March 31 public offering and 2mm units issued under the ATM. Debt/EBITDA was 9.0x or 7.9x adjusting for debt repayments made on April 4.