TSX:DIR.UN - Post by User
Post by
retiredcfon Jan 14, 2022 9:27am
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Post# 34316251
Scotiabank
Scotiabank Scotiabank analyst Himanshu Gupta is predicting another big year for industrial REITs,
“After two years of back-to-back outperformance for Industrial REITs, we think the set-up for 2022 is exactly the same; as such, we expect continued outperformance in 2022. the set-up for Industrial REITs in 2022 … Higher expected AFFOPU [adjusted funds from operations per unit] growth at lower leverage (relative to the CDN REIT sector) and potential for AFFO multiple expansion (relative to CDN sector and relative to US Industrial REITs). Thematically, Industrial real estate sector continues to fit the bill – secular tailwinds, cyclical beneficiary, and also one of the top-performing real estate sub-sectors in inflationary environment national industrial vacancy rate in Canada is now 1.8% vs. a balanced market at 5% to 6% vacancy rate in our opinion. Total absorption in Canada in 2021 was more than double the historical annual average – tenant demand for distribution and logistics warehouse was very strong and CBRE estimates continued positive momentum in 2022 as well. National industrial rents in Canada grew 10.9% y/y. Toronto, Montreal vacancy rates are below 1%, and despite that, new supply under construction is still similar to 5-yr averages in key major markets … Reiterate our SO [sector outperform] rating on DIR [Dream Industrial REIT], GRT [Granite REIT], and SMU [Summit Industrial REIT] "