Another Strong Earnings Report Another strong earnings report from RioCan, with double digit leasing spreads, strong same-property NOI growth, continued high occupancy rate. The market seems to only care about the macros right now. Any industry that uses any debt (ie. pipelines, banks, insurance, telcos, REITs) getting ignored for the big techs.
One thing to note is page 25 of the 2023 Q2 Investor Presentation. RioCan is not booking much sales revenue from their condos this year but next year they are booking over $330 million in sales from UC Towns 2 Oshawa and 11YV. Then in 2025 another $500+ million from UC Towers 2 and 3, Queen & Ashbridge and Verge. That's over $830 million cash going straight onto the balance sheet in the next 2 years.
Also on the call and in the investors report, Gitlin has telegraphed that they will be doing developments on existing land while preserving their current rents. So less developments like The Well where it's many years of expenses with no increased revenues until at the very end. Take a plaza in a well-performing area and build an apartment on the corner of the parking lot. A great candidate for that is the Scarborough Golden Mile development.
Volume has been anemic since the interest rate hikes so REITs are getting ignored. Now is the time to quietly accumulate shares and get paid monthly to wait. Buy when others are fearful.