The best REITs to use as an inflation hedge for 2022 Residential rental properties: Pricing power for landlords has recovered faster than expected, and apartment rents have rebounded strongly from the effects of the pandemic, driven by a surge in demand for housing, the report says. Growth in renewal rates and declining resident turnover is leading to an outstanding comeback for market rents. This is paired with the ever-increasing trend of millennials preferring to rent residential space versus purchase, a trend also affected by the rising cost of home ownership. From a supply perspective, the single-family rental sector is benefiting from an underinvestment in new affordable residential construction since the 2008 financial crisis, which has created a housing shortage that cannot be easily or quickly rectified.
Pape’s pick: Minto Apartment REIT owns a portfolio of high-quality income-producing multiresidential rental properties located in Toronto, Montreal, Ottawa, Calgary and Edmonton.
Third-quarter results were more or less flat compared with a year ago. However, the trustees approved a distribution increase of 4.4 per cent, to 47.5 cents a unit, annualized. Total revenue for the quarter was $31.2-million, which was in line with the previous year. Net operating income (NOI) was $19.4-million, compared with $20.2-million in the same period of 2020. FFO was $12.5-million (21.09 cents a unit), compared with $13.2-million (22.33 cents) last year. Adjusted funds from operations (AFFO) was $10.9-million (18.42 cents) compared with $11.6 million (19.68 cents), the year before.
Insiders have been buying the stock at an unusually high rate over the past year, a sign of confidence in the trust’s outlook.
We advised buying Minto at $17.77 in July, 2020, and reiterated our buy recommendation at $24.04 in August of this year. It closed on Dec. 23 at $21.67.