RBC analyst reiterates his top picks across the Canadian real estate sector
RBC Capital Markets analyst Pammi Bir surveyed the domestic REIT sector and reiterated top picks,
“Our Outperform ratings are intact and include Allied, Boardwalk, BSR, CAPREIT, Chartwell, Colliers, Dream Industrial, FirstService, First Capital, Flagship, Granite, InterRent, Killam Apartment, Minto Apartment, Morguard Residential, RioCan, SmartCentres, and StorageVault. On balance, Q4 marked a decent finish to 2023, with healthy FFOPU [funds from operations per unit] growth and strength in fundamentals across most subsectors. Organic NOI [net operating income] growth remains near record levels, aided by seniors housing where the recovery is in full stride and brisk advances in multi-family. Our earnings and NAV estimates took a slight step back, with a moderate, yet healthy outlook for growth in the year ahead. In short, we believe the sector remains on sound footing. Still, higher rates continue to weigh on investor appetite. With this in mind, we expect capital to follow the lead of fundamentals and earnings growth, with our preferred picks still leaning toward multi-family, industrial, select seniors housing, self-storage, and defensive retail”