RioCan Real Estate Investment (REI.UN.TO)

In Canada you want to be careful, especially in the retail space. We're seeing softness in the Canadian economy. In Q2, we had a negative GDP number. Consumer's stretched, and inflation since Covid has had an impact. He has no REITs in his portfolio. 

Probably can lean more to similar companies in the US. Be skeptical. Canadian REITs in general have high payout ratios, so they don't have a lot of flexibility financially.

Take a look at PLD.

Open air, grocery-centred. Very good centres and management. Some investments outside that core business in multi-family (where rental rates are contracting) and enclosed malls (HBC investment is an overhang). Still, distribution quite safe. Growth picture is quite bright, as they have levers to pull.

Big fan. In general, no new retail properties have been developed. Increasing efficiency (reducing staff and selling apartment segment), focusing on core strengths (retail). Positive on ability to grow earnings for next few years.

Cash flow per unit of 49c beat estimates of 45c; leasing spreads improved and same property net operating income rose. But it did take a $209M writedown on Hudson Bay and trimmed its guidance because of it (by 4c per unit). This hit offset benefits from its residential sector. The stock is down less than 1% which we would not consider abnormal. 
Unlock Premium - Try 5i Free

We think REI will be able to manage HBC's exit. The valuation is quite low at 9X cash flow, and, all things considered, the units have held up relatively well, down 6% YTD and up 2% in 52 weeks. The distribution was raised in February and payout is a decent 60%. We would not expect much from the sector, considering economic conditions, and minimal growth is expected (consensus). Still, this seems reflected in the valuation, and any good news would likely be quite positive to the stock. We would consider it 'OK', for income, overall. We are just not so sure this is a 'good' time to buy. 'Accumulate' slowly might be a better strategy.
Unlock Premium - Try 5i Free

Still a REIT giant. Leads in the retail-focused, mixed-property use. Definitely impacted by The Bay situation. Retail weakness over next 6-12 months could be an issue.

Saw 96% retail occupancy in Q4, and 1.5% rental growth. Pressure from e-commerce. Issued debt in January to bolster balance sheet, debt is still manageable. Rate cuts could continue to spark leasing demand. Yield is 6%, cash machine for income lovers. Still reliable.

Value pick given current share price. Company beginning to find its way again. Returning back to core strengths of the business. Focus on urban centers very good idea. Management team is performing well. 

Attractive level, high double-digit discount to NAV. Great portfolio. Multi-family residential portfolio is growing, may start selling it off and reallocating capital to retail or to share buybacks. Overhang: $600M worth of condos closing in next 3 years. Risk/reward is in your favour to buy here.

Concerns over exposure to condo market. Great portfolio, quite defensive. He's bullish on outdoor shopping centre landscape across Canada, with low supply and increasing demand from population growth. Great management. You're well served by holding on.

Short term, he's constructive, likely more upside, a yield beneficiary. Medium term, might be one of the largest REITs in Canada, but one one of the smaller investors compared to pension plans, for example. Buying and developing assets is complex, expensive, and fraught with uncertainty. Fragile profile, despite good yield and recent rally.

Exposed to rising interest rate payments on debt used to buy properties. Good yield is in competition with no-risk bonds. In the space he owns CAR.UN instead, which is multi-family housing.

Blue chip in shopping centre space. Growing footprint in residential. Will benefit from capital coming in to pay down debt. Internal growth is 3-4%. Good one to own going forward. Nice yield of 6%.

Distribution very safe due to proactive cutting during pandemic. Achievable net operating growth of 3%, last quarter was 3.7%. Despite rising rates, with population growth, limited new supply, and limited retail bankruptcies, setup generally good for shopping centres in Canada. In a good spot.