Boardwalk Real Estate Investment Trust T.BEI.UN

BMO

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BMO REIT analyst Michael Markidis highlighted an important decline in borrowing costs in the sector,

“The S&P/TSX Capped REIT Index was -0.8% for the week ended September 27. Index constituents with strong performance included: AP (+3.6%), NWH (+2.5%), and PMZ (+2.5%). MF REITs lagged: BEI (-4.1%), CAR (-2.9%), IIP (-2.6%) and KMP (-2.1%). In the week ahead, we look forward to (1) DIR’s Investor Day (8:30am-12pm on October 1) and (2) our Toronto-Montreal property tour (October 1-3). Robust population growth is starting to slow. The 41.3M estimate for July 1 was +250.2K (+0.6%) q/q and +1.2M (+3.0%) y/y. As highlighted in our note, the net increase in temporary residents (TR) slowed for the third consecutive quarter; however, the TR weighting (7.3% of the total population) remains well-above the federal government’s 5% objective. Barring a snap election, the minority Liberal government will update its Immigration Levels Plan by November 1 … Unsecured debt costs have meaningfully improved. $950M of new issuance was announced this week, including: (1) $250M from AP (4Y term with a 5.5% coupon), and (2) $700M from REI (a $200M 3.4Y deal at 4.0% and a $500M 7Y deal at $4.6%). All-in costs for investment grade issuers are at their lowest levels since mid-2022. The improvement year-to-date reflects credit spread compression (50-60bps for 5-10Y maturities, on average) and the bull steeping of the Canadian yield curve”