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Nexus Industrial REIT T.NXR.UN

Alternate Symbol(s):  EFRTF

Nexus Industrial REIT is a Canada-based open-ended real estate investment trust. The Company and its subsidiaries own and operate commercial real estate properties across Canada. The Company is focused on increasing unitholder value through the acquisition of industrial properties located in primary and secondary markets in Canada, and the ownership and management of its portfolio of properties. It owns a portfolio of 119 properties comprising approximately 13.0 million square feet of gross leasable area. Its industrial properties include 11250 - 189 STREET, 3501 GIFFEN ROAD NORTH, 10774 - 42 STREET SE, 261185 WAGON WHEEL WAY, 502-25 AVENUE and others. Its office properties include 127-145 RUE SAINT-PIERRE, 360 RUE NOTRE-DAME WEST, 329 RUE DE LA COMMUNE WEST, 353 RUE SAINT NICOLAS, 410 RUE SAINT NICOLAS, 2045 Rue Stanley, and others. Its retail properties include 2000 BOULEVARD LOUIS-FRECHETTE, 250 BOULEVARD FISET AND 240 RUE VICTORIA, 340 RUE BELVEDERE SOUTH and others.


TSX:NXR.UN - Post by User

Post by anon314on Aug 24, 2021 10:00pm
344 Views
Post# 33759344

Desjardins Research Report

Desjardins Research ReportBy Kyle Stanley, Michael Markidis and Alex Leon

he Desjardins Takeaway

We are resuming coverage following NXR’s C$112m equity offering. The proposed acquisition of ~C$359m of industrial assets highlights management’s ability to source off-market opportunities to accretively grow the portfolio. The 29% increase in public float should enhance trading liquidity, an issue for some institutional investors; industrial exposure (percentage of NOI) increases to ~80% (from ~73% previously). We are increasing our target to C$13.25 (was C$13.00).

<snipped>

Estimate revisions. Our 2022 and 2023 FFO outlook improve ~5% and ~3%, respectively. Notwithstanding the significant progress made on the transition toward a pure-play industrial REIT, NXR’s pro forma leverage increases only modestly to 8.3x D/EBITDA (8.1x previously). NAV revisions were immaterial.

Valuation

NXR trades at a 5.6% implied cap rate (4% premium to our NAV). Our C$13.25 target is based on a 10–15% NAV premium and equates to ~15x our 2022 FFO estimate.

Recommendation

We reiterate our Buy rating.


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