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Investor Insights

This summary was created by AI, based on 12 opinions in the last 12 months.

Allied Properties REIT (AP.UN-T) has a strong portfolio of unique, charming properties, but experts are cautious due to market headwinds and the impact of remote work on office demand. The company has sold its data centre portfolio to strengthen its balance sheet, but the potential for leasing space at previous levels and interest rates are concerns. While some see a buying opportunity with the stock trading at a discount, others believe there must be more catalysts for interest. The long-term assets and potential for a drop in rates provide some hope, but the future of the office REIT sector remains uncertain.

Consensus
Cautious
Valuation
Undervalued
SELL

Quite challenged on supply/demand. At 17.2% for Q1, downtown Toronto vacancy rate is higher than in suburbs, the biggest change in vacancy in 3 decades. Muted earnings growth, limited organic growth, higher debt load than before. Distribution may not be fully covered. Better opportunities elsewhere.

investment companies / funds
DON'T BUY

Valuations for REIT sector in general are exceptionally low. Part is interest rates, but the biggest overhang is the office space. That will take longer to play out, and remote work is becoming more acceptable by companies. Toronto estimates vacancy in the core is around 25-30%, gives him pause. Steer clear. Yield is 10.5%.

He's become more negative on the REIT model. With such a high payout, difficult to consolidate value in a down market, unless they have a sponsor behind them willing to supply capital. This plays into the hands of private equity.

investment companies / funds
DON'T BUY

Not everyone's back in the office, headwind for office demand. Negative headlines are pretty much behind the sector, now a show-me story. Can space be leased to same extent today as before, and at what cost? Sold data centre portfolio, gave it breathing room on yield and debt. Recently took on extra debt, further pressure on yield. 

Strong portfolio, but he's not ready to bet today. Lots of market headwinds. Have to consider, asset by asset, how their portfolio has changed over time.

investment companies / funds
BUY

Unique, charming, well-maintained buildings with smaller floor spaces. Well run. Development of "The Well" not smooth. Not expensive, opportunity to buy. Interest rates have hurt, but real estate should do well with lower rates.

investment companies / funds
WEAK BUY

Some tenants have pulled out of its big Toronto project, The Well. Its smaller spaces have hurt them, as people can work from home just as easily. Interest rates hurt real estate. Good company, lots of really interesting, character-rich properties. Owning something like this should do well for you in a better interest rate environment.

investment companies / funds
HOLD

80% of asset value is in Toronto and Montreal. Good operators in a difficult market. Discount to NAV. Committed to distribution of 10%, sustainable if they can continue executing into 2024. Sold data centres, giving breathing room.

investment companies / funds
PARTIAL BUY
Risk of bankruptcy?

Bankruptcy is extreme. And he bought it just a week ago. He's not bullish on office or retail, but it gets to the point where it's been hit so hard, you have to put in 1 of 3 real estate chips on a name like this. Premier asset, trading at a 30% discount. There will be a recovery, but it will take a while. Its smaller floor plans are appealing. 

Yields almost 11%, but he thinks it's sustainable. Sold data centres earlier this year, so that helped their leverage.

investment companies / funds
BUY ON WEAKNESS
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

AP.UN reported EPS of ($0.1842) and revenues of $138.455M, slightly beating estimates of $138.4M. FFO per unit was $0.598, a slight increase from its prior quarter, and AFFO per unit increased to $0.545. Management noted high demand for workspace in urban areas of major cities. Its dividend has risen to 11% and the stock remains cheap. Sales of its UDC portfolio have helped bolster its balance sheet and liquidity. We think a drop in rates can help this name, but we would like to see more catalysts here to get more interested in the name. For now, its small size and office exposure is not overly compelling, and we feel these are getting reflected in the company's valuation.
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investment companies / funds
RISKY

80% of portfolio in Toronto and Montreal. Availability rates are over 16%, yet new builds continue. Sold data centres. Good position on cashflow. Valuation now more compelling. Enticing 9% yield if you're willing to take the risk. Difficult asset class going forward, perhaps better value elsewhere. Many of these stocks look oversold, though he's not willing to place bets today.

investment companies / funds
DON'T BUY

Thinks office use will continue despite remote work.
Interest rates tough on business (debt levels & alternative bond yields).
Well run business with solid management team.
Pressure on stock lately - unsure on future of the business.
Difficult to ascertain future of office REIT sector. 

investment companies / funds
BUY ON WEAKNESS

Interest rates not only factor negatively impacting company.
Work from home, and overall economy also impacting share price.
Looking into company - has met with management. 
Good long term assets - waiting to see how economy performs in the fall.
Major change in how people work balanced with low share price buying opportunity.

investment companies / funds
BUY ON WEAKNESS

High book value REIT. 
Trending in the wrong direction.
High interest rates tough on business.
Wait to buy when downward trend reverses. 
Next 10-12 months will present a buying opportunity. 

investment companies / funds
DON'T BUY

Focus on office properties has put pressure on. We won't be working from home forever, but looks that way in the short term. Asset sales should help. Interest rates going up makes borrowing more expensive. Be cautious. Residentials and industrials offer more positive news in the short term.

investment companies / funds
WATCH
What's a tenable payout ratio?

Careful. Some companies base the ratio on earnings, others on free cash flow because their earnings are depleted by non-cash expenses for tax purposes. AP.UN is down by two-thirds and he's watching it carefully. Their downtown core assets are depleted, because office and commercial RE are radioactive, but this is the time to start looking at this. Has been best in class historically. Is watching this very carefully.

investment companies / funds
DON'T BUY

Way off from highs. Covid has changed how and where we work. What is your conviction level that office occupancy will revert to the pre-Covid mean? What's the timeline for that? He doesn't have the answers. It's in the "too hard" pile. If looking for a similar yield, try BCE.

investment companies / funds
Showing 1 to 15 of 172 entries

Allied Properties REIT(AP.UN-T) Rating

Ranking : 4 out of 5

Bullish - Buy Signals / Votes : 7

Neutral - Hold Signals / Votes : 1

Bearish - Sell Signals / Votes : 5

Total Signals / Votes : 13

Stockchase rating for Allied Properties REIT is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Allied Properties REIT(AP.UN-T) Frequently Asked Questions

What is Allied Properties REIT stock symbol?

Allied Properties REIT is a Canadian stock, trading under the symbol AP.UN-T on the Toronto Stock Exchange (AP.UN-CT). It is usually referred to as TSX:AP.UN or AP.UN-T

Is Allied Properties REIT a buy or a sell?

In the last year, 13 stock analysts published opinions about AP.UN-T. 7 analysts recommended to BUY the stock. 5 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Allied Properties REIT.

Is Allied Properties REIT a good investment or a top pick?

Allied Properties REIT was recommended as a Top Pick by on . Read the latest stock experts ratings for Allied Properties REIT.

Why is Allied Properties REIT stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Allied Properties REIT worth watching?

13 stock analysts on Stockchase covered Allied Properties REIT In the last year. It is a trending stock that is worth watching.

What is Allied Properties REIT stock price?

On 2024-06-24, Allied Properties REIT (AP.UN-T) stock closed at a price of $15.55.