BTB Real Estate Investment Trust BTBIF

Primary Symbol: T.BTB.DB.H Alternate Symbol(s): T.BTB.UN

Real Estate REIT - Diversified

BTB Real Estate Investment Trust (the Trust) is a Canada-based real estate investment trust (REIT). The Trust’s primary objective is to maximize total return to unitholders, to generate stable monthly cash distributions that are reliable and fiscally beneficial to unitholders, to grow the Trust’s assets through internal growth and accretive acquisitions, and optimize the value of its assets through dynamic management of its properties to maximize their long-term value. The Trust invests in industrial, off-downtown core office and necessity-based commercial properties across Canada for the benefit of its investors. The Trust owns and manages approximately 75 properties, representing a total leasable area of approximately 6.1 million square feet. The Trust operates through three segments, which include Industrial, Off downtown core office and Necessity-based retail. The Trust’s operations are located in the provinces of Quebec, Ontario, Alberta and Saskatchewan.

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BTB Real Estate Investment Trust > Question - Rise in Value of Industrial Portfolio FY22->FY23

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Post by b919191on Nov 01, 2024 5:46pm

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Post# 36293088

Question - Rise in Value of Industrial Portfolio FY22->FY23

So on October 15th, I asked the board of trustees of BTB to explain the significant implied increase in fair value of the company's industrial portfolio from FY22 to FY23.

The company indicates:

A- on page 14 of its 2022 Annual Report, the Industrial property portfolio is indicated to represent 30% of the total portfolio that year

B- on page 101 in note 4 of the 2023 Annual Report, that the total change in fair value in 2023 of its Industrial Property portfolio was stated to be $32.5mn

Now this increase in fair value, represents 9.3% over the 2022 value (30%x$1,164,881=$349,465), which is quite strange considering that:

1-
Weighted Capitalization rates used by the company for its Industrial portfolio went up from 5.75% end of FY22 to 6.09% end of 2023 (capitalization rates move in the inverse direction as the underlying value, so this is a headwind).

2-
Colliers Montreal (a major geographic exposure for BTB's portfolio) indicates that from FY22 to FY23, industrial market rents stayed flat and that asset transactions fell by ca. 50%, typically not a good indicator for value. This report is available at this link:

https://www.collierscanada.com/download-article?itemId=cdf055bd-ad04-42b1-984a-fc2c915e1e94

on this page

https://www.collierscanada.com/en-ca/research/montreal-industrial-market-report-2023-q4

Since the company will not answer me, I was wondering if a REIT expert reading this bullboard would have any ideas as to how this portfolio's value increased so much.

The company claims that its portfolio is continuously valued by 'independent' appraisors, and as we know at the same time, the employment by BTB of the CEO's daughter in a senior role is not considered to be worthy of disclosure in regulatory filings like the Management Information Circular, so obviously the word 'independent' could mean different things to different people.

Any clue what's going on? By all means, check my maths, I could have made a mistake

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