TSX:DIR.UN - Post by User
Post by
retiredcfon Jan 10, 2025 9:14am
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Post# 36397568
CIBC
CIBC CIBC analyst Dean Wilkinson is bullish on REITs for 2025,
“The year ahead will be marked by many familiar refrains: a Trump-led government south of our border, a normalization of the yield curve, a potentially weakening Canadian currency, and increased investor demand for yield instruments driving heightened capital markets activity – pull the tarp off the DeLorean and fire up the flux capacitor as it feels like we are going back to the future, a much-welcomed trip for long-suffering REIT investors … Unfortunately, it’s still a rate-driven macro trade, although we do expect that real estate fundamentals will take the reins back later in 2025, and return us to the familiar (and very welcome) territory of a stock picker’s market … Total Return Outlook For 2025: Given the sector’s unprecedented third year of significant underperformance we see a path to a more historical 5-15-per-cent range for the sector for 2025. Underlying this range are expectations for: 1) moderate FFO growth, 2) flat valuation levels, and 3) a mid-single-digit distribution yield (the sector currently offers a 5-per-cent yield). Top Picks: By asset class we favour Seniors Housing (Chartwell and Sienna), followed by Retail (First Capital), Multi-family; InterRent (Canada) and BSR (US), and Industrial (Dream Industrial), while we continue to view BN as a long-term core holding. HR is our pick from a value perspective”.