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Opinions Andy Nasr
Plaza Retail REITPLZ.UN.TOCOMMENTJan 09, 2015
Stock price when the opinion was issued
As of Jun 12, 2026. Market Open.
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Most assets are in Quebec and the Maritimes. Strip plazas in smaller markets. Historically stable, not a lot of growth. Difficult to raise rents in these small markets, but high construction costs have prevented tenants from moving. So cashflow is growing faster than it has in a long time. Low-risk optionality to buy up minority interests of properties already invested in. Healthy yield.
PLZ.UN is an open-ended Canadian REIT whose portfolio largely consists of open-air centres and stand-alone small box retail outlets. It pays a distribution yield of 7.1%, sales growth has been improving recently, margins have stabilized, and its free cash flow is sufficient for its distribution payments. It trades at an OK valuation of 12X forward earnings, and it is trading below its book value. We think it is a slightly risky REIT due to its small size and minimal growth rates. We would consider it 'OK' as part of a basket of higher risk income names, but not overly attractive as a single holding.
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PLZ.UN is an open-ended Canadian REIT whose portfolio largely consists of open-air centres and stand-alone small box retail outlets. It pays a distribution yield of 7.1%, sales growth has been improving recently, margins have stabilized, and its free cash flow is sufficient for its distribution payments. It trades at an OK valuation of 12X forward earnings, and it is trading below its book value. We think it is a slightly risky REIT due to its small size and minimal growth rates. We would consider it 'OK' as part of a basket of higher risk income names, but not overly attractive as a single holding.
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Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. It has good growth expectations and has stable tenants. Should be able to increase rents in-line with inflation over time. Has large anchor tenants that helps with stability. This could also mean a bit less bargaining power to raise rates however. Unlock Premium - Try 5i Free
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Jeffrey F. Olin
Not a name he has owned, simply because it tends to be a smaller cap name. Trades at a discount to NAV. Broadly speaking the whole real estate sector trades at a discount to NAV, so it is roughly in line. Feels management has done an excellent job and will continue to do so, especially in eastern Canada. A bit of a rollup strategy, so they will issue equity to complete acquisitions, but when you are trading at a bit of a discount to NAV, those acquisitions are not as accretive, but luckily they are operating in secondary markets, so they can buy the properties for a higher yield. He would look to add to your holdings at around $4. There are others that he likes better that give just as good of a yield, if not a little bit higher. (See Top Picks.)