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RioCan Real Estate Investment Trust (REI-UN.TO)

Toronto - Toronto Real Time Price. Currency in CAD
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21.36+0.06 (+0.28%)
At close: 04:00PM EDT

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  • N
    Night Fire
    RBC Insight
    -----Our view: REI reported Q2/22 FFOPU of $0.43, modestly ahead of RBC/Street at $0.42E/$0.41E, vs. $0.40 last year (+6% YoY). Although 2022 FFOPU guidance was upheld, we see results as incrementally positive from an operational standpoint. Occupancy remains high and stable, renewal leasing spreads were solid, and SP NOI growth is in the mid-single digits. REI was also active on the NCIB, while its IFRS NAV was fairly stable.

    -----Highlights:

    ------• Results relatively in line with our call. The +$0.01/unit vs. our forecast was driven by higher NOI, higher fee and other income, and lower net interest expense, partly offset by higher G&A. Note, results included $3MM ($0.01/unit) of lease termination fees and a $3MM restructuring charge for the elimination of certain positions. Results also included $5MM ($0.02/unit) of residential inventory gains, which were included in our forecast.

    -----• SP NOI increased a strong 6.2% YoY (+5% YTD) from occupancy gains, higher rents, and lower bad debts. Excluding pandemic provisions and legal property tax settlements, Q2 SP NOI was +3% YoY.

    -----• In-place occupancy stable sequentially at 96.2% (-10 bps QoQ, +110 bps YoY). Committed occupancy up slightly QoQ to 97.2% (+20 bps QoQ, +110 bps YoY).

    -----• Renewal leasing spreads at a strong +11% (9% YTD vs. 4.5% last year), with tenant retention at 91% YTD (+8% YoY).

    -----• 2022 FFOPU guidance unchanged at $1.68-1.71 (+5-7% YoY), in line with Street’s $1.68 (vs. our $1.66E). Guidance reflects 1) 3-4% SP NOI growth, 2) $625-675MM development completions (down $50MM vs. prior), and 3) development spending of $425-475MM (down $50MM vs. prior, due to construction delays from work stoppages by trades). Note, retail leasing at The Well is at 67%.

    -----• IFRS BVPU stable sequentially at $26.15 (+1% QoQ, +6% YoY). The IFRS cap rate edged up to 5.33% (+8 bps QoQ, -9 bps YoY), below our 5.6% NAV cap rate and the current 6.1% implied cap. In Q2, REI booked a modest $46MM ($0.15/unit) fair value loss on the portfolio.

    -----• Actively recycling capital. As of Aug-8, REI has closed/is in-progress on $376MM of dispositions at a 6.7% cap rate (incl. $123MM in 1H/22). That compares with $188MM of acquisitions in 1H/22 and $129MM of NCIB unit repurchases in Q2 (6MM units @ $21.52).

    -----• Debt/GBV at 45% (+80 bps QoQ, +30 bps YoY), D/EBITDA at 9.4x.
  • P
    Pat the Rat
    You know the earnings report was 🔥 because no comments from Danny.
  • M
    MATTHEW
    Danny Where Art Thou?
  • -
    -Amazingg-
    Buy at $20 enjoy dividend as 20 years retirement
  • T
    Taylor
    Doubled down on Riocan with a majority position at 73%.

    Buying at $20 is an excellent value ahead of earnings.

    Reits typically rally after interest rate hikes stop. Riocan had an excellent Q1 performance (97% occupancy) and should follow through again this quarter.

    Toronto retail cap rates have been stable. Management has been purchasing shares.

    23% discount to NAV. 5% Yield. Conservative payout ratio.

    Management plan to increase dividends over time.

    Cash flowing high quality urban land + a residential development business.

    I like the risk reward here and have pushed in the chips.
  • I
    Idont
    strong results
  • c
    chad
    Purchased 25k of Riocan back in 2012 for $26. Set it up as a DRIP for the last 10 years without investing personally anything and its only at 40k. Worth removing and just putting in an index fund?? Should I just let the DRIP keep going and will it start compounding more?
  • P
    Pat the Rat
    If you want the best buy price to get into REI, wait for Danny to show back up. Look at his post history along with RioCan's stock chart. He's nailed the bottom every single time.
  • K
    Kevin
    I buy a share or two of this weekly in my tsfa decent dividend and long term will be good...just add and enjoy the divi
  • R
    RetiredCEO
    Bought some REI this week. Will average down on any further weakness.
  • A
    AJ
    some analyst put this at $13....?
  • M
    Mike
    I think anywhere under $22 is a good deal...
  • M
    Moomoo
    If this really drop to 14-15 I will remortgage my home to buy as much as I can
  • J
    JC
    Holding for now. Might buy on the further drop. Man this forum is entertaining !
  • j
    jay
    Anyone have the link to the call?
  • I
    I
    So wheres the er were waiting
  • J
    J
    Buy for less than $14
  • j
    joe
    Way to cheap
  • T
    TooSexyForThisStock
    i suspect daniel to be the governor of the bank of canada