CANACCORD Latest report on PIREIT
EXCERPTS:
Real Estate -- Real Estate Investment Trusts
Q1/13 IN LINE; EXPECT ACQUISITIONS
TO POSITIVELY IMPACT H2/13
Pure Industrial REIT (Pure) reported Q1/13 FFO per diluted unit of
$0.095, up 6% year-over-year from $0.089 in Q1/12, and in line with
our estimate of $0.093 and consensus. The year-over-year increase was
due to a large volume of accretive acquisitions completed over the past
year, including $137 million of properties acquired during Q1/13.
Expect cash flow growth as acquisitions contribute in the second half of
2013. We expect to see growth in cash flow per unit in 2013 and 2014
as the substantial volume of accretive acquisitions completed and
announced thus far in 2013 are fully reflected in results. During Q1/13,
Pure completed the acquisition of 11 properties, comprising 1.3 million
square feet for an aggregate purchase price of $137 million at a
weighted average going-in cap rate of 6.7%.
Subsequent to quarter-end, Pure completed or announced the
acquisition of an additional 63 properties, as part of two portfolio
transactions, for an aggregate purchase price of approximately $430
million, equating to a going-in cap rate of approximately 6.3%. Most
notably, on May 15, Pure announced that it has completed the
acquisition of 59 properties from Slate Acquisitions Inc. (Slate) for
$358.5 million, equating to a going-in cap rate of 6.3%.
Reiterating BUY rating and C$6.00 price target. We continue to utilize a
6.10% cap rate to value Pure Industrial’s portfolio. Following Q1/13
results, our NAV per unit estimate increases slightly to $5.56 from
$5.42.
Our target price remains C$6.00 and equates to an 8% premium to our
updated NAV estimate. Combined with an annual distribution of $0.31
per unit, the forecast 12-month total return is approximately 24%. We
continue to rate Pure Industrial REIT a BUY.