TSX:DIR.UN - Post by User
Post by
retiredcfon May 22, 2024 8:28am
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Post# 36051529
Scotiabank
Scotiabank Scotiabank analyst Himanshu Gupta remained overweight in industrial REITs after an industry conference,
“We are keeping an overweight position on Industrial REITs based on a combination of lower AFFO [adjusted funds from operations] multiples and higher AFFO-per-unit growth (which we believe is key to outperformance in the REIT sector); (1) we expect Seniors Housing to show the highest earnings growth among all asset classes in 2024; (Industrial REITs rank no. 3). However, we expect Industrial to show the highest growth in 2025 as interest expense becomes less of a headwind and SP NOI [same property net operating income] growth is likely to accelerate; (2) No valuation premium for Industrial REITs. Industrial REITs now trading in line with the REIT sector on a P/NAV basis (versus a 9-point premium, historically) and only a 0.5x turn premium on a P/AFFO multiple basis (versus a 3-turn premium, historically) ... We reiterate our SO rating on GRT and DIR "