Dream Industrial Real Estate Investment Trust T.DIR.UN

RE:RE:RE:RE:couple thoughts on Cdn REITs

[maypeters]

well done CSC. Hope all is well Sarge. Best wishes to both. 


I have been looking at Skyline for a long time and the paperwork is a bit much for me. You can look at their returns over the past 1 year (private market NAV) vs the returns for a public company (market establishes the stock price - I doubt based on real NAV in private market). 

Same as other times this phase shall pass also and the light will come through at the end of the tunnel (expecting DIR to be bought out in next couple of years along with Tricon). The deals done in private markets indicate that the sales are above IFRS NAV values where as the stock prices currently are reflecting a 40% haircut to the IFRS NAV's. 

REITs are in pretty good shape compared to previous downturns and the biggest expenditure will be maintainance and repair costs in my opinion. 

GRT CEO had a good conversation a couple of days back with Middlefield along with Riocan CEO. 



Keep well. 

CanSiamCyp wrote: Hey Sarge!

Long time since we have communicated ... hope all is going well with you and your wife! We are keeping well here!

I understand your comment re transitioning into blue chip dividend growers cuz there have been a lot of opportunities to buy-in recently at 52-week low prices. There may even be lower prices on the horizon ... if Putin launches a nuke as a last desperate move .... or some such crisis! Hopefully not though (the nuke part, I mean)!

Re DIR.un: I am surprised to note your negativity. As far as our holding of DIR.un is concerned, we are up 14% on purchase cost and an ever growing % gain on ACB (which keeps growing cuz of the annual 6+% yield of largely Return of Capital ... which is a major strategic decision on my part cuz of holding REITs primarily in non-registered).

Re REITs in general: our $1.6 M portfolio of (currently) 13 entities stands at 1.75% gain cf. purchase cost, 15.01% gain cf. ACB (see remarks above re ACB and RoC), and yields a cash flow at 6.96% of current market value. What's not to like about that?

In years past, we had capital gains generated by acquisitions of AAR.un, RUF.un, ACR.un and MST.un ... all with significant CGs. I can't be bothered digging back to total those gains.

The only ... repeat only .... loser I have encountered in the REIT sector was our holding of HOT.un. It was liquidated for a huge capital loss (in a non-reg acct so useful to offset CGs on other entities). I don't consider that a bad track record for REITs. As one seasoned investor stated .... "if you say that you have never had a loser, then you haven't been investing!'.

At present our portfolio is running about $9.9 M (yes, there has been a pullback this year due to market conditions) and generating an annualized cash flow > $600 k. Portfolio composition is approx. 20% dividend paying commons, 15% REITs, 30% preferred shares, 30% Skyline private equity, and 5% cash. Taxable unrealized capital gains currently running about $600 k ... so the government will get some nice tax revenue after we kick the bucket!

Re Skyline: I have mentioned this to you in our previous communications. We are invested in 4 of their funds .... Skyline Apartment, Industrial and Retail REITs and the Clean Energy Fund. I have been delighted with the performance of all ... but the Industrial REIT has been exceptional in the past year. Essentially, REIT management decided to recycle their properties ... selling (at premium prices) their older warehouse properties and recycling funds into new build, custom designed, high clearance warehouse facilities. As a result, huge capital gains were surfaced. So from mid 2021 to mid 2022, our $400 k holding of Skyline Industrial increased to $560k based on increased unit valuation, and also generated monthly distributions at 5+% (based on the original unit value) over that same time period.

Cheers!