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RioCan Real Estate Investment Trust T.REI.UN

Alternate Symbol(s):  RIOCF

RioCan Real Estate Investment Trust is a Canada-based real estate investment trust. The Company owns, manages and develops retail-focused, mixed-use properties. Its portfolio includes leasing, development, and residential. The Company’s properties are held by various tenants, such as grocery, pharmacy, liquor, personal services, and specialty and value retailers. Its portfolio comprises approximately 187 properties with an aggregate net leasable area of approximately 33 million square feet. Its properties include 1293 Bloor Street West; 145 Woodbridge Avenue; 1556 Bank Street; 1650 -1660 Carling Avenue; 1860 Bayview; 1946 Robertson Road; 2422 Fairview Street, and others. Its properties for commercial lease, including grocery anchored, open air, mixed-use/urban, and enclosed centers. Its residential brand, RioCan Living, delivers purpose-built rental units and condos. 1293 Bloor Street West is located at the intersection of Lansdowne Ave & Bloor Street in Toronto.


TSX:REI.UN - Post by User

Post by incomedreamer11on Feb 10, 2022 8:46am
222 Views
Post# 34415807

TD comments on results

TD comments on resultsRioCan REIT (REI.UN-T) C$22.66 Q4/21 Results Ahead; Cash Distributions Raised +6.25% Sam Damiani, CFA Jaz Cumberbatch, CFA (Associate)

Impact: POSITIVE

Our Take:
RioCan delivered a solid beat on both FFO and AFFO, with significant NCIB activity and a distribution increase both demonstrating management's confidence in the outlook.

Results vs. Forecast (Exhibit): Q4/21 FFO/unit of $0.46 was ahead of our $0.37 estimate and consensus of $0.40 largely due to ~$26mm of residential inventory gains ($24mm above our forecast) related to the sale of a 75% interest in the condo development component of Leaside Centre in Toronto ($54.5mm or $145/sf buildable). On our calculation of AFFO/unit, RioCan's $0.347 beat our $0.33 estimate by 5%. Committed occupancy increased for the fourth consecutive quarter, rising +40bps q/q to 96.8% (Q4/19: 97.2%). In-place occupancy was +50bps q/q at 96.1% (Q4/19: 96.3%), and the highest since Q2/20. SPNOI growth (including BDE) was +4.9% Y/Y, and excluding BDE was +0.1% - the first positive quarter since Q3/20.

New 2022 Guidance: Management expects FFO/unit growth of 5%-7%, implying $1.70/unit or ~3% ahead of our estimate and consensus. The Well – Retail: Firm leases now represent 50% of total retail space (up from 33% a year ago), and those in advanced discussions would increase it to 62%. With the spring 2023 grand opening approaching, we expect lease-up to accelerate.

Balance Sheet/Capital Allocation: Distribution Increase: RioCan announced a +6.5% distribution increase to $0.085 per unit ($1.02 annualized versus $0.96 currently) commencing with the February distribution. Management targets recurring distribution increases over the long term based on a FFO payout ratio of 55%-65%
NCIB Activity of $178mm in Q4/21: RioCan repurchased 8mm units at $22.32/ unit (equating to the maximum daily permitted between mid-November and December 31).
First Apartment Acquisition: RioCan acquired a 90% interest in the 139- unit first phase of the "Market" apartment complex in Laval for $46.8mm or $375,000/suite and based on a 4.06% cap rate (believed to be this project: https:// condosmarket.ca/en/plans-rental).
2022 Development Completions to Exceed Spending: RioCan targets ~ $500mm of investment and ~$700mm of completions, which should, in our view, reduce the PUD/GBV ratio (now 11.0%).
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