Scotiabank Scotiabank real estate analyst Mario Saric restated his top picks in the sector after a CBRE report on industry profitability,
“We think winners = Apartments and Strip Retail, while Industrial (Class A), Office and Regional Malls = more challenged. Geographic winners = Halifax and perhaps Ontario, while Vancouver, Edmonton and Quebec lagged … Our ratings are intact heading into Q1 results. Top Growth Picks = BAM [Brookfield Asset Management], CAR [Canadian Apartment Units], CIGI [Colliers International Group], CSH [Chartwell Retirement Residences], GRT [Granite REIT], IIP [Interrent REIT] and SVI [Storagevault Canada]. Top Value Picks = BN [Brookfield Corp], DIR [Dream Industrial REIT], and REI [Riocan REIT]. Top Income Picks = AP [Allied Properties REIT], CHP [Choice Properties REIT], CRR [Crombie REIT], and CRT [CT REIT] … We still believe higher deal volume (tied to BoC/Fed rate cuts) is a critical catalyst for CAD REITs/BN/CIGI to the extent it helps substantiate our estimated 19% REIT NAV discount (perhaps closer to 10% than 20%; still “buy” territory) … We still believe that CAD Office REITs could perform well in a Soft Landing given the discounted valuation (for AP in particular) but fundamental catalysts (i.e., occupancy gains) may have to wait for H2/24″