TSX:KMP.UN - Post by User
Post by
retiredcfon Dec 11, 2024 8:37am
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Post# 36356195
Scotiabank
Scotiabank Falling rents across most of the country have Scotiabank analyst Mario Saric sitting on his hands where apartment REITs are concerned,
“Overall, we believe a return of positive asking rent growth is needed for improved Apartment trading multiples, particularly given population growth has yet to fade (see link to Economics report) and ahead of the surprisingly still-pending Fall Economic Statement. We don’t believe material further relative downside exists in the Apartment REITs but patience is needed for a relative recovery in our view. Our Top Apartment picks are IIP (more 12-month in nature) and CAR (prefer it in short term). Of our 4 SO-rated REITs heading into 2025 (AP, CAR, CRR, IIP), we chose IIP as our Focus 2025 Top Pick due to expected expansion in relative FFOPU [funds from operations per unit] outperformance following significant unit price underperformance YTD … From least to most, we estimate IIP markets saw avg. 0.3% m/m 2BR asking rent erosion (Ontario and Montreal outperformed; 75% and 21% of portfolio respectively), just a shade better than KMP (at 0.4%), with MI, CAR and BEI markets at 0.5%-0.9% erosion (Exhibit 1) respectively, all better than 1.0%-1.7% market rent erosion in October”