TSX:CSH.UN - Post by User
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retiredcfon Sep 23, 2024 8:15am
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Post# 36236014
RE:More Scotiabank
RE:More ScotiabankMore from Scotiabank but a different analyst. GLTA Scotiabank analyst Himanshu Gupta updated clients on senior housing sector, where he recommends an overweight position within real estate,
“We remain overweight on Seniors Housing sector due to compelling demand-supply fundamentals, and leading FFOPU [funds from operations per unit] growth across real estate asset classes. Despite the outperformance YTD, valuation is still reasonable once we look at full NOI [net operating income] potential … Demand remains robust due to favourable demographic trends: As per StatsCan, 80+ population is expected to grow at a CAGR of 4.6% in the next 5 years, 4.7% in the next 10 years and 4.4% in the last 20 years. So, fair bit of demographic dividend over a long period of time … wing to muted supply in the next three years and continued aging population. C&W [Cushman & Wakefield] expects occupancy to surpass pre-pandemic levels in 2025 (Exhibit 1) and then move towards 95% in the following years. Montreal and Quebec market occupancies approaching 93%+ while Ontario is still lagging with Toronto at ~89% and Ottawa still at ~80% level. In Western Canada, Calgary is lagging at ~85% market occupancy while other markets (Vancouver, Victoria, Edmonton) are at or above 90% … Elevated cost of construction is the biggest roadblock to new supply … Rent growth showed further improvement in 2024 and moving towards 5% annual growth rate”
The analyst has buy ratings on Chartwell Retirement Residences and Sierra Senior Living Inc.