Allied Properties REIT (AP.UN.TO)

Prefers BPY because you get more distant exposure. It is a better long term play. AP.UN-T is brick and beam structures. Beautiful properties that attract knowledge working crowd. It is sensitive to the area of the economy that is growing the most.

This has a great development pipeline. The acquisition they just announced is a good example of their ability to fund redevelopment and increase the NAV over and above what other office REITs can do, especially in the somewhat challenged office market where you are going to see a big increase in supply during the next few years. Relatively expensive. Trading at about a 15% premium to NAV, which makes it difficult to justify in the context of other office REITs, but pretty much in line amongst the highest quality office REITs globally.

You can’t do much better than owning this one. Often a Top Pick of his. It has pulled off a little if you want to add to your position. Doing amazing new developments in the Toronto area. A little income, tremendous income growth and guided by fantastic management.

(Top Pick July 9/13, Up 12.65%) Has traded at a premium historically because of low leverage and payout ratio. This is a core holding in his portfolio.

(A Top Pick June 17/13. Up 12.92%.) Still a huge fan of this. Has tremendous growth opportunities sitting on its balance sheet. Class I Industrial Brick and Beam kind of office. Thinks it is still worth much more. Still a Buy.

(Top Pick Jun 17/13, Up 10.90%) Tenanted by younger workers who want to live downtown. Fantastic neighbourhoods. 30% Toronto.

There is no craze that the real estate market will fall apart.

(Top Pick May 13’13, up 2.54%) Relatively expensive but held up rather well. High quality portfolio. Thinks there is $4-5 per share of development potential to be unlocked over next few years.

Has gone nowhere over the last year because of the rise in interest rates. A specialty brick and beam, former warehouses on the fringes of Montréal and Toronto. One of the biggest Internet hotels in North America with the CBC. Also moving into Calgary, Kitchener and Waterloo. About 90% occupancy so they are well covered. 4.2% yield. A nice play on lower-cost office space, geographical expansion.

A little bit more growth than some of the others. Have done some joint ventures with Riocan (REI.UN-T) where they are redeveloping pieces of property.

Began several years ago as a brick and beam REIT and now they are a turnaround story. They buy rundown buildings and make them more competitive and get significantly greater rents.

REITs should not be overweight. It is mostly in the East of Ontario so he prefers AX.UN-T. It needs to be more diversified so you could consider ETFs.

(Top Pick Jun 17/13, Up 5.09%) One of Canada`s greatest stories. Well managed with expansion opportunities. Have above average rent growth.

(A Top Pick June 17/13. Up 3.15%.) Brick and beam buildings. Excellent management. A lot of growth in this area. This is a stock that everyone should own.

Is this a good time to get into REITs such as Allied Properties (AP.UN-T) and RioCan (REI.UN-T)? This is a very good and timely question. He had dramatically reduced his weight in REITs when interest rates started to move, because there is a wrong tendency to think that all REITs are like long-term bonds. These 2 are both good ways to be in a REIT sector. Don’t go into REITs in a big way, have small weighting.