Plaza Retail REIT (PLZ.UN.TO)

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.

Maritimes and Quebec. Loves this kind of property with a Shopper's Drug Mart, a bank, a liquor store, that kind of thing. Highly respected management team, really good expertise in their sub-markets, staying in their lane. Steady investment.

CEO retired, but Andrew still thinks highly of management team. Primarily in Eastern and Atlantic Canada. Fits his grocery-anchored profile. Attractive 7+% distribution, and high implied cap rate. Discount to NAV, though not the greatest, and decent upside.

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