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InterRent REIT (IIP.UN-T) is viewed as having a promising long-term outlook, with some analysts recommending patience for potential gains. However, concerns have been raised regarding its heavy concentration in Ontario and Quebec, areas facing rent controls and slower population growth. While there is a broad recovery underway in the sector, forecasts suggest that Canada might experience a temporary population decline, causing some investors to be wary. Nevertheless, analysts highlight a substantial discount to NAV and a compelling value-added strategy that could lead to improved property rents. Ultimately, while recent performances have missed cash flow expectations, there is a sense that the REIT may remain a good hold and could present interesting investment opportunities at current price levels.
It did miss cash flow per unit estimates in the Q3. Not by a lot, but a miss is a miss (15.9c vs 16.1c expected). The yield curve, despite Bank of Canada rate cuts, has still managed to shift upward. The recent government moves on immigration likely has some investors worried. Canada's population will actually likely decline for a couple of years now. Finally, IIP has had a premium valuation for some time. Even now it is above the peer group average at 17X cash flow. We would consider it a HOLD but it is getting interesting here. It historically has been one of the better REITs.
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Long-term, yes, for residential REITs, like apartment ones. They also benefit from more immigration. This leads to higher rents. InterRent, Minto and CAP are his preferreds in this space. CAP is the biggest, and they hold a super-quality portfolio that they've been upgrading in recent years. All these are focused in Ontario. but they benefit from lower interest rates. A caveat: Ottawa is slowing immigration to Canada, which feeds demand for apartments. Expect choppiness, but these are good holds.
Once he realized interest rates weren't going to stay at zero, he scaled out of real estate from 22% down to 5%. He held onto industrials, but sold this one. Really likes the company, but is waiting until interest rates tick down again. Very interest-sensitive investments.
You won't go wrong with either. Thinks highly of management for both. Both are concentrated in Ontario. IIP.UN is smaller, more nimble, with a focus on Toronto-Ottawa-Montreal and a growing presence into Vancouver. CAR.UN gives exposure to GTA and across Canada. If he had to choose, he'd pick IIP.UN with its 25% discount to private market value, lots of value in the portfolio.
There is lots of value here due to a supply and demand imbalance leading to big growth in rents. There are 400 to 500 thousand new Canadians arriving annually in the next couple of years with not enough space for them. Also foreign students who stayed away during the first two years of the pandemic are returning
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Reducing debt levels over time. Payout ratio at a sustainable rate. Risk of no rent raise policy to continue. Primarily focused on Toronto and Montreal. Unlock Premium - Try 5i Free
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Positive Same-Property Net Operating Income(SPNOI). Peers reported negative SPNOI. Rising financing costs, but better than peers. Low interest rates locked in. Current environment represents high barriers for the supply side given the increase in interest rates and operating costs, making existing apartment profiles such as IIP valuable. Unlock Premium - Try 5i Free
InterRent REIT is a Canadian stock, trading under the symbol IIP.UN-T on the Toronto Stock Exchange (IIP.UN-CT). It is usually referred to as TSX:IIP.UN or IIP.UN-T
In the last year, 9 stock analysts published opinions about IIP.UN-T. 3 analysts recommended to BUY the stock. 3 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for InterRent REIT.
InterRent REIT was recommended as a Top Pick by on . Read the latest stock experts ratings for InterRent REIT.
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.
9 stock analysts on Stockchase covered InterRent REIT In the last year. It is a trending stock that is worth watching.
On 2025-04-02, InterRent REIT (IIP.UN-T) stock closed at a price of $11.32.
Owns shares in business. Current share price a very good time to buy. Would recommend being patient, and holding for the long term.