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Opinions Andy Nasr
Dream Global REITDRG.UN.TOCOMMENTJul 24, 2013
Andy NasrStock price when the opinion was issued
As of Dec 11, 2019. Market Open.
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Jaime CarrascoHis favourite REIT, because most of the cash flow is coming from Europe, and he wants to generate more cash outside Canada. (Analysts' price target: $15.54)
Jaime CarrascoInovalis (INO.UN-T) or Dream Global (DRG.UN-T)? There is probably too much duplication to own both. Management has done a very, very good job since the IPO. They’ve grown through acquisition and have diversified. They own an institutional quality portfolio, and thinks they have an opportunity to grow in continental Europe. Their assets are primarily in Germany. Instead of buying Canadian names that have exposure to Europe, he is actually going directly into Europe and buying some names.
It is a decent name if you own it. It is tough to switch out of it. He has preferred names including a top pick today. Management promised to diversify the portfolio and they did a good job of that. The payout ratio is high so this is why he is cautious on it. There are risks in the devaluation of the Euro. He does not think they will have to cut the dividend.
Office buildings in Europe, primarily in Germany. He initially avoided the IPO because of significant tenant concentration in the form of Deutsche Post. They’ve since done a very good job of diversifying through several acquisitions. Feels there is a lot of room for growth in Europe. Acquiring at very attractive spreads (property yields relative to cost of financing) which should drive pretty significant cash flow accretion and appreciation over time. However they have to deal with foreign exchange, which has negatively impacted the stock so it is one of the only REITs in Canada where you seen the NAV decline, which will overhang the shares going forward. 8.3% dividend which he thinks is sustainable based on the acquisitions they have made.