Analyst Michael Markidis resumed BMO Capital Markets’ coverage of retail REITs,
“We are reinstating coverage of six Canadian Retail REITs. Outperform ratings on Choice Properties REIT (CHP) and Crombie REIT (CRR) reflect our current preference for lower leverage, less onerous near-term debt maturity schedules, and lower capital commitments to active development. Outperform-rated First Capital REIT (FCR) is our pick among the three non-sponsored names, for its emphasis on dispositions, debt reduction, and underlying earnings profile. SmartCentres REIT (SRU), CT REIT (CRT), and RioCan REIT (REI) are rated Market Perform. We believe our call on REI is most at odds with consensus… Retail renaissance. Post-pandemic operating performance has been buoyed by solid in-store sales growth and reinvigorated retailer demand for space. Mounting pressures on the consumer (inflation, higher interest rates, rising unemployment, etc.) may take some of the wind out of the proverbial sail; however, we believe the group is well positioned given portfolio composition, tenant rosters, and relatively limited supply risk”