Scotiabank Scotiabank REIT analyst Mario Saric found a much better mood at Scotia’s annual REIT conference,
“Attendance materially higher for our Breakfast Broker Outlook & Property Tour. Last year, investor focus = converting SSNOI [same-store net operating income] growth into FFOPU [funds from operations per unit] growth (given higher debt costs). This year, we think focus transitioned to NAV validation via private deal flow and SSNOI growth sustainability. Much moreso than prior year, market rent trends were very topical, as was identifying potential equity issuers. Importantly, Corporate and Investor sentiment was markedly improved, both y/y and vs. last 6 months. Last year, we remarked that 2024 could still be a good year for CAD REITs, but some patience is required. While we’re likely post the Halftime show re: recovery, we still see 10%+ NTM [next twelve months] total returns in a “soft landing”.
“Our top picks and estimates are intact. Our Top Growth Picks = CAR, CSH, CIGI, IIP, GRT. Top Value Picks = AP, DIR, HOM, IIP, SVI. Top Income Picks = AP, CRR, CHP, SIA. Recent rating change (upgraded HOM to SO [sector outperform]).”