TSX:DIR.UN - Post Discussion
Post by
retiredcf on Jun 07, 2024 12:34pm
CIBC 2
CIBC REIT analyst Dean Wilkinson assessed the outlook for the sector in the wake of the rate cut,
“We still believe that 2024 will be a flat valuation year with returns dominated by current yields. That being said, the XRE has posted a decrease of ~8% YTD vs. the broader market (TSX) up ~5%, ultimately supportive of the sector underweight we had going into the beginning of the year. Today’s rate decrease could perhaps signal a shift in sentiment towards the “bond proxies” and result in the space catching up on a relative basis over the latter half of the year as the yield curve normalizes … The REIT sector is trading at a ~23% discount to NAV, a level that has historically represented a more compelling value proposition. Going into the latter half of the year, we continue to favor the Industrial and Apartment subsets given the higher growth potential we see for them through 2025 and a deeper historical valuation discount; our top picks are Killam (KMP.U) in the Apartment space and Dream Industrial (DIR.U) in the Industrials”
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