RBC Capital Markets real estate analyst Pammi Bir likes seniors housing and multi-residential REITs to outperform,
“Seniors housing and Canadian multi-family should lead the pack on growth. We expect Q4/23 YoY FFOPU [year-over-year funds from operations per unit] growth of 3 per cent, modestly below last quarter’s 4 per cent. The range is wide, with anticipated leadership from seniors housing (up 17 per cent YoY) as fundamentals continue to recover. Self storage should see a double-digit advance from easier comps, while multi-family should also post solid growth (up 8 per cent YoY). Industrial (+2%) is next, followed by retail (down 1 per cent), diversified (down 5 per cent), and office (down 9 per cent). Our 2024E reflect sector average FFOPU growth of 3 per cent, with our preferred subsectors of seniors housing, self-storage, industrial, and multi-family maintaining leadership. Our estimates are intact heading into reporting season, although the drop in bond yields since Oct-2023 could yield modest upside”
Mr. Bir has outperform ratings on Allied Properties REIT, Smartcentres REIT, Chartwell Retirement REIT, Granite REIT, Dream Industrial REIT, Riocan REIT, and First Capital REIT.