Canadian Apartment Properties

CAR.UN-T

It's been sideways this year and only recently breaking out to all-time highs. The chart looks awesome and there's strong demand for rentals. And you're paid a dividend. (Analysts’ price target is $52.56)

All the demographics and secular boxes are checked. They own 41,500 residential units in Toronto -- accounting for half the funds asset value. They have the ability to develop 10,000 new apartment units. A big presence in the Netherlands and Dublin as well -- the only pure apartment play there. Yield 2.83% (Analysts’ price target is $52.56)

It has benefited from population growth in the residential housing space. They own assets across Canada. He thinks they may become a major take out target. Their free cash flow yield is pretty low, around 3%, so he thinks there may be better opportunities out there.

REITs are still in favour. Remember that they've performed quite well this year. The sell off is an attractive time to buy. Really likes this one. You have to own it if you're going to play the Canadian apartment space. Largest Canadian landlord. Own European assets as well. A steady name. Room for growth.

Fantastic ride. He likes it. They execute well. He never owned it based on valuations. They do well renovating. They are doing well in the Netherlands and doing very well there. When you miss a boat you get to be shy about it.

He liked this so much because the old Wynne government in Ontario re-imposed rent controls which discouraged the construction of new apartments. CAR.UN has excellent management, However, will the Ford government remove rent control and encourage developers to go into high-end apartments? If so, it could take 5 years to create an oversupply of apartments, so he feels safe with this REIT. CAR.UN holds first-class assets.

It's better to rent than buy, even with yesterday's new incentive in the federal budget. So, rentals will stay tight. He wishes he owns this REIT. They've done a good job creating value with most assets in Ontario where rents have increased. He sees no headwinds against CAR.UN, but it trades at 26x AFFO, which is high. It's too pricey to enter now. The higher it rises, the shyer he gets. Definitely hold it.

They just had a good quarter. A solid 10% YOY growth. Occupancy at 99%. He sees 5% AFFO growth. A low 73% payout ratio, so the dividend is safe. Great balance sheet. It's amazing, apart from a very high valuation and pays only a small dividend. A fine name, but he wouldn't buy it now.

It is probably the best one in Canada in terms of residential REITs. You want to be cautious on REITs because they are expensive. This is not an ideal time to step into REITs.

Within the REIT sector, apartments are interesting because there is a real lack of rental space. Rental rates are really accelerating at just under 12%. They are growing cash to be distributed at about 8%. They have a 2.8% dividend that is growing faster than other apartment REITs. They have a strong balance sheet. They can get into more projects. They will add apartments in Toronto and Vancouver. It is one of his largest positions as a firm. (Analysts’ price target is $50.56)

They just did a money raise, and he likes this stock--and rentals. Young people must rent, but there are limited units. This applies across Canada.

A shortage of housing and a willingness to rent to added to their tailwinds. At these levels, he would wait for a better price.

It's still a buy. Doug Ford took rent control off new Ontario apartments, which did this sector a favour. This will spur new building of units. A well-run company. The dividend is under 4%, which is slightly lower than other REITs, but boasts better growth potential.