Daily Buy/Sell AdviserUnable to post the full article so here's the link. GRT.UN is the third recommendation. GLTA
https://www.adviceforinvestors.com/news/canadian-stocks/3-reits-to-buy-3/#gsc.tab=0
3 REITs to buy
Here are two REITs rated ‘sector perform’ and one rated ‘sector outperform’ from a survey of the most widely covered income trusts by Canadian analysts.
Minto Apartment REIT (TSX—MI.UN)
How was the third quarter of 2020 at Minto Apartment REIT? According to National Bank Financial analyst Matt Kornack, Minto underperformed multi-family peers in terms of aggregate same-property net operating income growth. However, he notes that this was largely due to vacancy and rent pressures in the furnished suite portfolio.
Looking past the continued weakness in the furnished suite portfolio, Minto’s apartment properties put up solid year-over-year organic growth driven by strong rent increases moderated slightly by lower occupancy levels, Mr. Kornack says. This speaks to continued demand for affordable rental product in Canada’s largest urban areas (only its Alberta properties showed signs of stress), he argues.
The analyst maintains his “sector perform” stance on the REIT and his $21 target unit price for it as well, implying an 18.1 per cent return.
Remarking on the third-quarter 2020 results, the analyst notes: “Funds from operations (FFO) per unit were $0.22, in line with us and consensus at $0.22. Net operating income was 0.8 per cent above our estimate; revenues were 1.2 per cent lower, while costs were 4.8 per cent lower than our forecasts.
“Unfurnished suite occupancy declined slightly quarter-over-quarter to 97 per cent from 97.2 per cent, with furnished suites serving as a yield maximization tool—the number of furnished suites has declined to 233 quarter-over-quarter from 239 due to COVID-related weakness in the segment. Furnished suite occupancy for September was 75 per cent, up from June at 65 per cent (versus September 2019 at 92 per cent).
“Average rent for furnished suites declined to $3,460 in the third quarter of 2020 from $3,956 for the second quarter of 2020 and well below the $4,410 for the third quarter of last year.
“With regards to capital expenditure Minto spent $8.7 million during the quarter versus $5.5 million in the third quarter of 2019 equating to 43 per cent of net operating income versus 31 per cent in the same period last year.