TSX:SGR.UN - Post by User
Post by
DanielDardenon Aug 27, 2024 3:03pm
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Post# 36198155
CIBC
CIBC Our Conclusion
Sumayya Syed, CFA
Alexander Augimeri
Neutral
Earnings Update
With tenant demand for grocery-anchored real estate still robust, SGR management expects supply/demand dynamics to remain favourable. High construction costs and interest rates have put pressure on new supply, inherently rendering existing space more scarce. With healthy underlying demand for well-located assets, and historically low vacancy, SGR continues to capture healthy lifts on renewals. Addressing near-term debt maturities could help improve sentiment, which is a focus area for the REIT.
Units are now yielding ~10%, a level that may garner increased investor interest. Nevertheless, the payout ratio remains relatively elevated at ~95%, though we do expect an improvement from NOI growth. Our $10.50 NAV and $9.50 price target remain unchanged as we finetune our estimates.