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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Canadian Apartment Properties Real Estate Investment Trust (CAR.UN)
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- View Questions on CAR.UN
SmartCentres Real Estate Investment Trust (SRU.UN)
- View SRU.UN Profile
- View Questions on SRU.UN
Granite Real Estate Investment Trust (GRT.UN)
- View GRT.UN Profile
- View Questions on GRT.UN
Dream Industrial Real Estate Investment Trust (DIR.UN)

Q: Your thoughts on Smart Centres please?
Will this and another REITS do well as rates move lower? Nice Yield.
Thanks

Asked by Carlo on June 19, 2024

5i Research Answer:

SRU.UN trades at 0.7X book and 17X forward EV/EBITDA and pays an 8.5% yield, but there is little growth, debt is high, and the retail sector is somewhat susceptible to a weaker economy. Its payout ratio is 84%, which we are OK with, but the stock has not moved much over the past several years. With interest rates declining, we could see this name improving its fundamentals and therefore valuation, but we would prefer a higher growth and quality REIT such as CAR.UN, DIR.UN, or GRT.UN.

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